Last week, a nice house came on the market in Woodley Park, a favorite neighborhood of mine. It's also a favorite for some clients, and the day the house was listed, I called to arrange to show it to them. Sorry, the agent said, no showings until the broker's open house (6 days later). OK, I am a patient woman, and I knew that no one else can get in, so last Tuesday I finally showed it.
The house shows very well. It was also very well priced, which was a good thing because there are two very similar houses for sale on the same block. My buyers liked it and we were discussing maybe possibly writing an offer.
The agent decided to help me out. She told them she expected the place to sell for way more than the asking price and that she was pretty sure there would be three other offers. She even speculated that they expected to get about $70,000 over the asking price.
Whoa! Pricing for that much less than your sellers want to get is a strategy that went out of style here about two years ago!
These buyers are what you might call motivated. They live in an adorable doll house in Georgetown, and baby number two is due very soon. But they are also being very smart about this move, and the thought of getting involved in a bidding war in this market did not appeal to them one bit!
This listing agent is an old pro. I really like her a lot and have enormous respect for her. But even the best of us have breakdowns of the old brain-to-mouth filter mechanisms.
And I think her listing will sell quickly, it just won't be to my buyers. Ah, what might have been!
Pat, if your buyers liked the house why didn't they just put in their offer and let the chips fall where they may? This listing agent could be all bluff!
Patricia,
I'm with Gary! I'm old fashioned and still believe that the right buyers find the house just right for them...!!! Too right, huh! :) Thanks, Fran
Hi Pat! I've had a couple of buyers lately that have been interested in property that I've phoned the listing agents who have told me that there are other offers coming in. My clients (NOT ME!) choose to go to their second choice! They are too savvy to fall for the 'other offer' technique (frankly BS, I think!) in 2008!
Conversely, I have a listing that I had a BA tell me that she was sending in an offer and the same day I had another inquiry that had a serious buyer. I did not tell either one of them that I had an offer--because I DIDN'T and I didn't want to scare either one of them off!
Times have changed--listing agents need to get with the 2008 program!!
Gary and Fran, the house was almost perfect but lacked a couple of things on their important list - like being a block outside the school district they really want, and it was a little small. I think if they didn't have an very close due date for the new baby, they would have flat out vetoed the place. Still it came very, very close. And they were involved in a whole bunch of bidding wars before they got their last place. Maybe up here a lot of agents (and buyers) who were around during the white hot market will not get involved in multiples unless the house is amazing and totally perfect.
Debe, in our listing agreements, the seller has to consent to telling agents about other offers.
It would have been interesting if your buyers had written an offer for the asking price...just to find out if it was a bluff or not. Has it gone pending yet?
Patricia and Debe- This is relative to your geographics. Here we do get multiple offers on our short sales. This is a great listing strategy that works even down here in the foreclosure capital. Foreclosures here get multiple offers. One of our listings' neighbor (foreclosure) had 18 offers in 3 days. We had a bidding war on 2 of our latest short sale listings. Great for our sellers, less of a deficiency, in their best interest. If the buyer agents don't want to play ball, they don't have to. There are more buyers where they came from:)
Katerina, I think multiple offers, even auctions, have always been part of the foreclosure scene. But a lovely house that is not exactly under priced and sold outside of the short sale/foreclosure process is - well, people have different expectations, at least in this market. We're still not seeing many distressed sellers in the upper Northwest DC markets.
Patricia, Sounds like the operative words here are OLD pro. She needs to modernize her techniques. We must disclose multiple offer but a phone call saying an offer is coming does not qualify. How many of those so called offers never materialize.
Hi again, Pat--same here! If we don't have an offer in hand though, why they tell buyer's agents they have one is beyond me--it runs the buyers off here AND, it's just WRONG (especially if their sellers don't know that they're doing that!
I think that there is the occasion where one can provide too much information. Obviously, this was one of them.
Patricia: It sounds to me like you need to put one more thing in your purse to take while showing besides mls keypad, blackberry, pen, and other stuff. In this case... it would be a rolled-up sock to stuff in this darling woman's oversized blabby-mouth. Not a good plan. Take care....
I know this is off the subject... but with this being Christmas time... I would love to see a post on how one of my favorite places to shop, Pentagon City Mall... got decorated this year. Always loved that place. Take care...
Ahhh what about the appraisal? Is the house 70K underpriced? It is amazing that anyone would try that tactic in today's market. We all know how quickly it can backfire. Oh and by the way if the home was in the MLS and you were not allowed access that is a violation of MRIS rules!
Patricia, I'm stunned that she would try that strategy in this market. Good houses still sell over list on occassion today, but $70K over is a stretch. Sounds like she's playing games, especially since no showings until six days after entry into MLS...completely illegal.
Definitely information overload. I hope you hae a spectacular 2009, you deserveit!
What happens when she doesn't get more than one offer over the listing price? Are her sellers going to be upset and turn down the offer? She really is setting herself up to have some unhappy sellers.
Silly agent. She blew an opportunity to look like a superstar. I still do think that you can price a home to generate multiple offers, by pricing it *right* where you think it will sell and staging the crap outta it. Then, you use the multiple offers to pick the best offer (Personally, I would pick the one with the strongest financials). Thinking you're going to get $70K over asking is CRAZY, though, unless it's a multi-million dollar property.
It sounds like she over-promised her Sellers.
Also, we can put our listings in as Active/No Showing in our MLS and it's perfectly legal as long as NO ONE goes in the property. I try to put them in at least 2 to 3 days before showings start to allow agents to get the house out to their Buyers and build interest.
I don't know about blabbing about the price but the technique is as old as the hills and, hey, we gotta be creative these days. The old "auction" method of keeping people at bay and then having muliple groups in the house create a sense of urgency. Pricing way below market is an almost sure-fire way to get multiple offers (I'd do it myself if could only get a Seller to go along with the plan). Of course, it can backfire when buyers are less than thrilled about getting into a bidding war.
However, I can tell you from experience that it does work and it will usually get the Seller close to what they "really" want.
Pat... awe. that important list. Everyone should have one and not settle for less... this is a huge investment.
On another note... I will be down in the DC area on the 21st and 22nd... I am going to put together an AR gathering together for noon on the 22nd... I might be staying in Annapolis... or in that area. Any recommendations?
Pat, It reminds of some very good advice I received many years ago. "State your case and then keep your mouth shut", which is exactly what she should have done. Sounds more like she is working for herself and her bottom dollar than for her sellers.
Patricia- Did you notice these cool blue colors for comments returned now? It is so easy now to scroll down to the return comments.
Buyers need to make the final decision all we can do is give them the opportunities. Sometime listing agents do make comments thinking it will help the seller and sometimes it does backfire.
No showings for 6 days till the brokers open? If it's on the market it means it is available to show, right? Isn't that a violation with the MLS?
Patricia,
Things happen. You can't always change things, and the toughest thing to change is the opinions of your clients
Wow. What are the sellers going to do if someone hands their agent a full price cash offer with no contingencies?
I can't believe the agent is doing this today, in 2008.
Patricia~I believe that less is more. The less you say, the more you may receive. I'm sure you'll find your clients the perfect house!
Patricia - Wow! I'd like to know what the house actually sold for. Please keep us posted... :)
Pat - I don't know ANYONE right now that is offering MORE than the asking price - they are all low-balling everything!
Thats a bit nutty. Not to mention the fact that; isn't not having a property in MLS and NOT being able to show it a violation?
Pat - I agree with you, buyers prefer to feel like they got a fair shake in this market instead of feeling pressured by a bidding war to pay above and beyond the list price, especially by 10's of thousands.