Multiple offers have been more of the rule than the exception for at least the last year or two in the Bay Area and the Peninsula real estate markets. Buyers often wonder if it is even worth trying to compete against other offers in this seller’s market.
There are more qualified buyers than there are properties available for sale.
When there is very little inventory on the market, it is not uncommon for a seller to get 4-5 offers. We have seen many properties attract over ten offers. If you find the right property it is probably a good idea to make your offer, even if you feel your chances are slim of having the winning or accepted offer.
If nothing else, experiencing the home buying process is valuable even when you don’t have your offer accepted.
Frequently pending home sales fall out of escrow and that can create an opportunity for people who made the other offers. Many sellers worry that once they accept the “best offer” that the buyer might get buyer’s remorse and start questioning their commitment to purchase. When a buyer backs out of a transaction, all of the other offers can disappear. At that point many buyers wonder if there is something wrong with the property. Offers fall apart for a variety of reasons. Sometimes a concern about the property is the cause, but very often it is due to the buyer having a change of heart.
It is important that you always make the best offer you can. The highest priced offer with the best terms and conditions usually is the winning offer.
When contemplating writing an offer, finding out what the seller’s motivation is can be very important.
If you can be flexible and work with the seller to accommodate their needs, it can be to your advantage.
Buying and selling real estate can be a very emotional experience. It is a suspenseful roller coaster ride with a lot of unexpected twists and turns. It is important to remember that during these extreme market conditions buyers are often coerced into offering terms and conditions that would never be expected, or considered, under more normal market conditions.
First, buyers need to realize that the prices being offered may not be attainable when the market stabilizes. Secondly, to be competitive buyers need to make offers with no contingencies. Thus, you are waiving the opportunities for your own inspections and appraisal.
It is important to fully understand and be comfortable with, the concessions being made to participate in this unusually competitive market.
This article was published in the San Francisco Examiner.
Articles are written by Eric Ruxton and Larry Aikins, owners of Terrace Realty, Inc. and Terrace Associates, Inc. in Redwood City. Terrace has been in business more than 55 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.