I am buying a home and submitted an offer. The day before the acceptance date my agent tells me that listing agent just got another offer, and there's a big chance to lose a good deal, and he suggests to submit higher offer, and so on... No further information, I can just guess.
Is there any way to find out if they really have another offer?
Hi, well that could be true or they could be sucking you in. Here is your counter if you really want the house. $1,000.00 over the highest and best offer received by a bonifide buyer up to $XXX,XXX.XX, with such offer being verifiable by buyer's agent four days prior to. This offer expires _____hours after the date and time made. Good luck with that, it worked for me in my last REO purchase. Bill
Careful getting sucked into that game ... remember your agent only gets paid if you close so they'll let you bid sky high to secure their commission. Set your own max price - try your best to look at it objectively. Just because there are other offers doesn't mean they are higher than yours. There are tens of other houses you'll be just as happy with if you don't get this one!
OK. So, how bad do you want this particular house? Are other similar ones readily available at similar prices? What have similar houses in the same neighborhood sold for recently?
If you can dispassionately say you can walk away and find another house you will like every bit as much, either withdraw your offer or just tell them your offer is your highest and best.
If you're about to get a screaming deal, and even bumping up your offer still makes it a screaming deal, then offer more.
If you'll just die if you don't get this particular house, offer more.
Realize a primary residence is not an investment. Its an expensive doo-dad. Its no different than a car. Buy the one that meets your needs and that you can afford.
I have at times responded to this "highest and best" request with a higher offer. I did actually end up buying a house in a situation like that, though after we had a contract we had appraisal issues and I got back to a better price. Much more often I've said "never mind". But for me its just an investment.
I do recommend you treat buying a house like buying a car. There's no such thing as a "dream car" unless you're talking about a Lamborghini or some such. They've probably made 10,000 copies of any particular car. If you're willing to walk out of the dealership without looking back, you're in a much better bargaining position. Unless you're talking about a villa on the cost of some beach resort, its no different with houses.
"Highest and Best", A.K.A. Bidding against yourself.
I've been down that road of self-doubt as an investor, and it really shouldn't be any different for you as an owner/occupant. Know your best number going in and do your very best to stick to that number...despite the emotional triggers that come along.
Easy to say, but not always easy to do.
Todd Bonner
Thank you guys for useful info!
I understand that I should have MY highest number in mind, and I do have it. But, it turns out that any single-offer situation can be easily changed into multiple-offers without any control from the buyer side. Am I understanding correctly?
I have heard "there are multiple offers, bring us your highest and best" so many times I now just know to expect it.
If I like the property, and I have some wiggle room in my offer, I will respond with a better offer.
But I actually suspect in many of these situations there is no other offer. Or, there's a lowball offer that's been setting on someones desk for weeks.
I've not tried Bill's approach, but I don't really think there's any way to find out if there's another real and relevant offer. Offer what its worth to you. If you don't get it, find another house.
For that matter, find several houses and make offers on all of them. When I'm buying, I write up to a half a dozen offers each week. With inspection and financing contingencies, you're not going to get forced to buy more than one (be sure your offers say "liquidated damages", not "specific performance" just in case.) And if one goes belly up, its not a big deal.
Hi, I agree with other posts here, there are other deals out there and bidding against yourself is not a good idea,
If you are a home buyer looking for a home to live in and the market is rather limited, as it is in my area, another grand on a house that you want is no big deal, IMO. The location, style of the home and schools can be factors that one must live with. This morning I looked out the window and I had 9 deer in my backyard, I'm a mile an a half from a supercenter and in one of the most sought after areas of town, I can walk down hill to the lake or accross the street to a state conservation area. Now, tell me that's not worth another grand, it is to me and it was still under the asking price. It's not always about numbers at the date of closing. I'm also living in an area I grew up in. Homes in the neighborhood are rarely on the market, chances are the others that looked at the hosue didn't really know this area as I do, in fact, the Realtors didn't know much about it either, other than the obvious location. When I looked at the house another couple with Texas tags was also looking at it, now I'm not going to allow that to happen, LOL! I totally agree that you should never fall in love with a house, especially if it's just an investment, but I'd rather live in something that I will enjoy instead of just knowing I got a steal of a deal. I won't mention that my first wife lived three doors down in highschool and how all the kids would sled down the hill through the woods to a pond, no I won't mention that, I'm just a hard nose investor guy (LOL). I can always sell it for more than I paid, even today, but I'll probably just keep it in the collection. To each is own, what ever floats the boat. What's a few grand on something you want? Good Luck, Bill
I agree with many of the aforementioned posters. Definitely don't want to get 'sucked' into that game. Couple of years ago when the industry was white hot, I found myself competing against multiple investors for wholesale properties in Seattle market.
Many times to no avail.
I even went at lengths to put escalator clauses in my contracts to avoid getting outbidded.
I thought it would be best for me to specify the minimum amount I was willing to pay for house as well as the maximum. If my maximum bid got rejected, I was simply going to walk away & move on to the next deal.
Obviously, I am thinking from an investor perspective and not simply a homebuyer.
OP..you pose an excellent question when you asked...Is there any way to find out if they really have another offer? Unfortunately not. Listing agent is not compelled or obligated to state how many offers on table; the highest offer received; etc. For all you know...you could be competing against yourself.
Sad, but true!
I don't know about other real estate boards, but in my area, Realtors (actually Brokers) are very adverse to liability issues, they go to extrems to avoid any potential problem. If a listing agent siad that there were other offers to jack up a deal and there was not another offer at that time, that agent may have his/her stuff flapping in the wind as a misrepresentation. If someone lost a deal and they filed a complaint that could easily be invetigated. Lying, even if it's in the best interest of your client, would mean trouble here. Good Luck, Bill
Like others I've encountered this more times than I can count, including on "trash outs" and "burn outs" that have sat so long the agent has forgotten they have the listing.
I always use one of the two following answers; "OK, withdraw my offer then", or "if I lose it, I lose it".
I've NEVER bid against myself and NEVER lost a deal when told that line of carp.
frank
Sorry, I am not familiar with this procedure. Would you mind to explain a little bit further, what exactly verifying the contract through the listing broker means? Is this something that Realtors are supposed to know and do on a regular basis?
I am fine with paying 1-2K over, but as you said I just wanted to be confident and sleep well in the future, knowing that I was not a simplest scam victim :D
No way to find out. But in most cases they wont lie about this because if they get caught it would get them in huge trouble. Realtor have a code of ethics they have to follow and they would get in big trouble and lose their license.
Brian Haskins
lol, that's a good one Brian!