The real estate market across Southern Oregon is very active right now and numerous properties across the county are receiving multiple offers. As listing brokers, we review every bid with the Sellers; there is so much more that goes into an offer besides the offer price. It is important to dissect the Buyer’s qualification, contingencies, timelines etc. During this active market we are reminded once again the power of relationships, reputations and what a crucial role both play in the success of real estate transactions.
Often, people think the offer with the highest net to the seller will be the “best” offer but that isn’t necessarily the case. In this market, the “players” are also a very significant factor. When multiple offers are received, it is important to compare apples to apples when trying to decide which offer is strongest. Included in evaluating the price, the terms of a loan if they are getting one, down payment, lender choice and the ability (as well as willingness) to bridge any gap between appraisal and final sales price. It’s also crucial to know if you are working with another broker who is success-oriented. Will they exert their best effort to keep the escrow together, guiding their clients in a reasonable manner when it comes to repair negotiations or are they known for waiting until the 11th hour and then sending over the entire inspection report as an unreasonable request of the seller? Will they do the work in order to facilitate a seamless transaction or will they simply submit the offer and then step by and let the cards fall where they may? Do they have regard for contract deadlines, clear and consistent conversation or do they just beat to their own drum figuring the seller is over a barrel and has no other choice?
Working with brokers who are solution-oriented, have credible relationships within the industry including lenders, appraisers, contractors, etc. or are they known for having a more adversarial approach can make all the difference. Countless times we have negotiated successfully for our Buyers when their offer wasn’t necessarily the highest knowing there are other things of value that aren’t necessarily qualified by dollars. Fellow brokers have commented on feeling confident we will do the work and the transaction will be a pleasant experience despite any hurdles along the way.
Recently, we listed a home that received 13 offers within 48 hours of hitting the market. Most of the contracts were subject to financing but only one was cash. By the time we were done receiving offers, our highest offering price was 10% over the listing price.
Only one of the offers didn’t have a contingency, making their offer subject to the appraisal coming in at the sales price. In advance of making a decision, and in an effort to “even the playing field,” we spoke to the Broker of the highest financed offer and got verbal confirmation they were willing (and able) to make up the difference between the offered price and the appraisal – within reason. We had worked with her before, knew we could be candid about the situation but also take her at her word that her clients would step up the plate if needed. They weren’t prepared to write a blank check per se, but they did acknowledge the market values of homes were higher than what the comparable sales stats were indicating and they very well may need to be creative. Having access to the same sales data the appraisers use, we knew what the house was worth “on paper” but we also knew what the market was doing in the present. When we chose the final listing price, we had already stretched it as high as we could and still be justifiable so when the appraisal came back under the ultimate contract price, we weren’t all that surprised. We successfully negotiated the final sales price and closed successfully. All parties were prepared to address the objection in the likely event it would arise and there were no surprises.
As more and more buyers and sellers prepare to jump into our real estate market, we encourage you to do your homework. Align yourself with a reputable professional. Don’t be afraid to interview the prospective Brokers, learn more about their track record in successfully negotiating transactions for their clients and also keeping the escrows together. Talk with lenders, escrow officers, home inspectors regarding their opinions of who, within our industry, is known for being reputable, professional, respectful and also successful. These traits are not mutually exclusive. Look for someone who sells more than a handful of houses each year because chances are, they have seen just about everything and will have invaluable experience on how to navigate your escrow.
If you are interested in learning more about how we work, we would love an opportunity to chat with you.