Multiple Offers: The Luxurious Dilemma
Fall 2008 and into 2009, we have been in 5 or 6 multiple offer situations. The luxurious dilemma. Please do not think that every market segment in Austin, TX is a buyers market; it is not so.
For example, we just put a little old house, a bit of a fixer-upper (needs paint in and out and needs a big kitchen project) but great location, corner lot, cute as a button. Listed at $287k last Saturday … 2 offers on Sunday and a bunch more phone calls this week.
If you are looking pretty much any where in Austin proper under $250k, beware. Beware because you are most likely competing for houses in a segment of the market that is a sellers market.
One of the best ways to tell if you are in a sellers market … look at the data for what has sold in that neighborhood and price range in the last 30-60 days. Is the average days on market under 60 days? Sellers market.
Here are two very real examples we ran this week for clients:
Area 10S $180k – $200k sold in the last 60 days (4/2/09), avg days on market 62. If I take off the few that were on the market 4 months or longer (let’s say they were over-priced or perhaps weird properties), then the average is 43. There are 6 that sold in less than 40 days.
Area 1A in Northwest Hills around Anderson HS for homes with 2100-2700 sqft (pricing mid $300k – low $500k) … there are 4 homes that sold in the last 60 days and they were on the market an average of 17 days. Yes, less than a month.
So buyers, know the market and put together a smart offer strategy. Hopefully you’re working with a knowledgeable and experienced Realtor who knows how to assess and maneuver the market.
Remember, in Austin the best homes that are priced right will sell fast. We want you to pay as little as possible for the house (it’s our job to look after your financial interest), but we want you to get the house.
Right now there are a lot of first time homebuyers on the market in Austin (and they should be considering the $8k tax incentive and historically low interest rates … more on that later). Let’s say conservatively there are 20 couples out looking in south Austin this weekend for homes under $210k (and believe me, there are more than 20 couples looking at homes this beautiful April weekend in Austin, TX) with 3 bedrooms and a garage and maybe a little yard and just maybe, hopefully an updated kitchen.
Right now in area 10N in the $180k – $210k price range with 3 bedrooms … there are 6 properties on the market. In area 10S there are 18. So a total of 24. Let’s say 4 of those are in poor locations, 2 are on busy streets, 6 are fixer-uppers and 4 have no street appeal. That leaves us with 8 homes on our list.
Of the 20 couples looking this weekend, how many of those are going to narrow down to that same list of 8? Quite a few. Let’s say of those 8 homes, 2 are awesome and priced right. I bet those 2 will be under contract this weekend; almost guaranteed.
So remember, you might be in a sellers market and at risk of being in a multiple offer situation. Study the market closely and figure out the right offer strategy for the house.
So, multiple offers … here is how we handle them:
- Inform all parties that we are in a multiple offer situation
- Make sure every party has exactly the same information
- Give them a new deadline (ie tomorrow by 5 pm) for each party to submit their best and final offer
- Present all offers to the seller
- Seller responds to / negotiates with one offer
- If that does not go through, seller can move on to the 2nd offer
- Keep all parties informed of the process; remember that Realtors and buyers worked hard to bring the offers to the table, respect their time
- Some buyers will withdraw their offer when they are informed of the multiple offer situation because they do not want to compete … sellers, do not get over-confident
- Can result in over the asking price offers
- Keep in mind what you think the house is worth (it may be under priced and worth offering a little more)
- Keep the offers clean and as uncomplicated as possible, present a lender pre-approval letter with the offer and a personal note to the seller telling them about you and why this house is right for you (real estate is very personal and sellers make emotional decisions all the time … it’s not always the bottom line)
We hope you get the best house at just the right price. Call The Nelson Project at Keller Williams Realty for professional assistance. Good luck out there.
© Julie Nelson and The Nelson Project at Keller Williams Reatly, 2008-2010. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Julie Nelson and The Nelson Project at Keller Williams Realty with appropriate and specific direction to the original content.