Are Sellers shopping my potential offer?

Question

I look for homes that have been on the market for 60+ days to avoid the competition and get a good deal. Maybe it's just a coincidence but I find that whenever I tour and express interest in these homes all of the sudden several offers roll in. Especially strange this time of year and after these homes have been sitting forever. Are the sellers getting wind of my interest and telling their clients that they need to get their bids in asap?

I suppose the way to avoid this is be ready to submit an offer immediately after looking at a house.

Eric Jubeck · Answer

Hey Mike, could be a few things happening, partnered with coincidence too...

Yes, sometimes a house that has been sitting all of a sudden gets all the interest at once...

Yes, it could be the Agent going back through trying to get cold leads warm again after your "interest"...

Yes, it could just be a negotiating tactic they're trying on you, or creating FOMO to get you to submit an offer...which you didn't really say if you actually got beat out on an offer or not?

But regardless of any of that, I wouldn't worry about it. The numbers are the numbers...and whatever makes sense to you for what that property is worth to hit your goals, then that is what you go in at. Forget all the hype they're feeding you and just offer what the numbers are telling you that you should be offering. Submit the offer and worst case you get told no, or get beat out, and you just move on to the next property anyways!!! Don't think too much into it and just trust yourself and that's it...the right property at the right price will come around for you, just gotta keep taking those swings!

Mike D. · Answer

That makes sense Bill. That must be what's going on. Thanks!

Bill B. · Answer

More likely the seller’s realtor calls the realtor of everyone that has toured the property before that date. Tells them if their buyer is still interested they’ve had an uptick in interest.

Or…you’re not the only one looking at properties with more than 60 days on market. :-)

Maybe you want to switch to 50 or 90 days on market since everyone seems to target 60 days for some reason.

Christopher Jason Lloyd · Answer

Set your search for 50+ not 60+ days is what I would say.  Also, in my market we have seen a winter rush after about two months of slow season so that could be a factor.

Christian Ehlers · Answer

Yeah the listing agents if they are doing their job will try to drum up as much interest as possible for their clients properties, so once one offer is submitted the agent will reach out to anybody that's been "thinking about it" and let them know about the offer, to try and get additional offers coming in.

Then once they have 2 they will keep calling and say they have multiple offers, trying to create as much FOMO as they can. Stick to your numbers and as others have mentioned look for what the sellers really want. (Price, ease of sale, highest likelihood a deal will close, help moving and on and on).

Eric Jubeck · Answer

Well you never want to overpay, so getting beat out by real offers though frustrating, not necessarily a bad thing...

I'm not sure how your contracts work in IA, but the next thing to consider is how you can get creative with the terms, to be the most desirable offer. So many people get caught up on just the Purchase Price...but there are so many other terms in the sale that can be made more favorable to the Seller to win out your offer...

For example here in FL, many people use the AS-IS contract...so outside of the normal Cash vs Financing scenario...you have EMD, Right to Cancel/Inspection Period, Financing Contingency as some of the major terms that sway decisions. So if you're an investor coming in with a lower offer than probably the retail buyer looking to homestead it...what can you do differently? Here most retail buyers only offer 1-2% in earnest money...so you as an investor can you do 5%?...and then take it a step further and say after the inspection period say I'll increase my earnest money to 10% with an additional deposit? Speaking of inspection period, how good are you with walkthroughs? And do you have a reliable contractor or inspection company on speed dial...so for us here, maybe an investor doesn't want to waive the inspection, but does a short 3-5 day vs the retail buyer asking for 7-15 days. Why? This makes it more favorable for the Seller to say they'll take yours knowing in 3 days you'll have 10% deposit locked in...versus the retail buyer with only 1% skin in the game, that could take two weeks for inspections, only to back out and force them to put back on market weeks later...and oh by the way, the retail buyer probably has financing with an even longer contingency to back out when they "can't get funding". Another big thing is for your agent to find out what would be most favorable to the Sellers through the listing agent. Maybe the thing that matters most is they need post-occupancy so that they can comfortably sell their home and have the month to acquire and move into the new place...most retail buyers wouldn't dare offer post-occupancy, but you as an Investor can and just collect the rent back that extra month...

The point is, in your market, how else can you get creative with your offer outside of purchase price to get more deals won? That's a conversation to have with your agent and make sure they're selling your deal to the listing agent as well...otherwise you need a new agent!

Are Sellers shopping my potential offer?

Most Popular Reply