AGENT WANTS ME TO BID AGAINST MYSELF ON BUYING A 4-PLEX

23 Replies

I am running into this frequently and looking for a way to work around. In a strong local market, income properties are often listed in stating that offers are being taken for x number of days, and acceptance will be x number of days afterward. This drives me crazy as the listor is looking for more than the list price regardless of whether there are other competitive offers or not. 

On this 4-plex, I made a full price offer with no buyers side commission payable, title insurance and closing costs buyer paid,  no appraisal contingency, and sent a copy of bank statement showing more than sufficient funds for cash puchase (account number redacted) with a 12 day closing and an inspection clause. I made the acceptance date prior to the end of the timeframe offers were being accepted to see if it would be taken, and there was no response- as suspected. 

The end if the period for taking offers is end of business today and I have a message from the broker wanted to see if I am interested in the property, ignoring the fact I had already submitted an offer, which deadline has passed. 

At $700K with no buyers side commission (representing myself as I now do) and title insurance closing costs buyer-paid, I was already $20K higher on a net sheet to the owners- and still they are looking for more on a new offer. 

How can I break through this ongoing approach of trying to get me to out-bid myself? I dont know if there are even any other bidders, though it will be insisted that they exist. I would like to ask for a copy of the other offers, with entities redacted, but the broker will claim to be offended by this. Some brokers will even say that they had so many offers that they are asking one more time for highest and best to bring it further up, with no evidence that such offers exist. 

How can I find out what they really need to make this work, without the exercise in salesmanship? Broker has left a message asking if I am still interested - while ignoring my first offer - with the end of business today being a deadline for offers. I'm trying not to build resentments. 

Hire an experienced agent.  You are wrong in assuming there is no buyer side commission to be paid.  It is still being paid, just not to your agent since you dont have one.

The novice thinks they are putting themselves in a better position by not having an agent, when the exact opposite is true.

The thread isnt about hiring an agent- I used to be an agent. - done it many times successfully and listing agents like the additional fee split with the sellers, and I leave that up to them on how to split it. 

I going to learn how to break through this repetitive scenario instead of being told to get a buyers agent further in-between matters. I prefer dealing directly with the listing agent instead of bringing another set of personal interests in. Thank you. 

@Burt L. I would let them know that you already submitted an offer. Ask if they have had the time to review it. They are calling you because you probably are the only offer out there. Just ask them if your submitted offer was seen and how can you move forward with it

Experienced investors know that they must put in 50 offers to get one good one accepted.  As a investor you set your number and never go above that number. This eliminates the possibility of bidding against yourself.

You should offer $500 below your max on the property. When they ask for more you then hit your final number.

You never go above your predetermined set price and you never care what they need to make a deal work. The only number that matters is what you need to make it work.

Bidding wars are for amateurs.

Dude, this is crazy.  They gave you crickets, your absolutely awesome for them offer expired, now they want to know if you're interested?

My offers die with the expiration date, period.  I've had sellers call back months later to see if my offer was still good.  What offer?  I'd never go back without an additional 10% discount at least.  

Just for them being a DB, I'd ask 'What offer?  Oh, the one that expired?  Give me your lowest and best and I'll take a look.  If I have time."      

I get this sometimes I think just because I also offer solo and am not a 'professional' or represented by one.  But I don't offer asking price all cash, either.  Yep, there should be consequences for treating you this way @Burt L.    My new offer would take some hide off these egos.   I say make them pay with significant concessions.  No deal is worth being treated this way.

Originally posted by @Steve Vaughan :

Dude, this is crazy.  They gave you crickets, your absolutely awesome for them offer expired, now they want to know if you're interested?

My offers die with the expiration date, period.  I've had sellers call back months later to see if my offer was still good.  What offer?  I'd never go back without an additional 10% discount at least.  

Just for them being a DB, I'd ask 'What offer?  Oh, the one that expired?  Give me your lowest and best and I'll take a look.  If I have time."      

I get this sometimes I think just because I also offer solo and am not a 'professional' or represented by one.  But I don't offer asking price all cash, either.  Yep, there should be consequences for treating you this way @Burt L.    My new offer would take some hide off these egos.   I say make them pay with significant concessions.  No deal is worth being treated this way.

 LOL, I haven't done this with RE, but you sound like me when it comes to selling other items. For instance, I used to have a '66 Caprice. A guy walks up and asks me "what's the lowest you will sell it for"....my response was "what is the highest you will pay for it?".

I couldn't tell if the look on his face was one of confusion or one of realizing what  dumb thing to ask me (although that dumb question gets asked often).

@Burt L.

I don't have any great ideas about how to avoid this in the future. 

Are they telling you that there are other offers? And you don't have to tell the agent this, but are you willing to pay more? If so, then what about an escalation clause to beat the other offer by $1,000 or $2,000 up to a chosen max. You make the escalation clause contingent upon receiving a copy of a bona-fide, arms-length offer. That way, you only pay more if there are actually other offers.

It's not sexy, but it seems like an option.

@Russell Brazil your answer to his question is to hire an agent? Totally not helpful! I too have experienced this nonsense with agents and have even caught them in the act of doing this without any other offers....No way I’d hire an agent when I know they are being shady a good deal of the time. Buying/selling real estate is not that difficult of a process....

Originally posted by @Brian Pfaehler :

Russell Brazil your answer to his question is to hire an agent? Totally not helpful! I too have experienced this nonsense with agents and have even caught them in the act of doing this without any other offers....No way I’d hire an agent when I know they are being shady a good deal of the time. Buying/selling real estate is not that difficult of a process....

 You know what I do when I buy properties in states Im not licensed in. I hire an agent, even though I am in the top 1% of agents nation wide.  No miscommunications between me and a listing agent. No missing vital information in the private section of the mls about how to make an offer.  Using the leverage of the relationships of another top agent in that other market to make my offer stronger.  No getting frustrated wondering why I cant get someone to return my call. No mistake of using the wrong forms etc.

You know how often I run into problems like the op has described and which seem you have run into...never.

This doesn't seem that bad too me. It sounds like they were hoping for an offer higher than yours, but they didn' get one. So, now they are trying to give you the impression that there is a higher offer and see if you will increase yours. If you don' want to bid against yourself then don't.  In your place, I'd probably submit a new offer for 5-10% lower than ypur previous offer, unless your previous offer was a screaming good deal. Or, you could just wait a couple weeks and then resubmit a lower offer. The more time that goes by the more motivated sellers tend to become.

You made a fair offer and should feel good about it.  You are not going to be able to control the other side; so, you will need to be able to control your own emotions.  Real estate is supposed to make life better, not worse.  And real estate is all salesmanship.

I do not waste my time even bother with the formalities.  I contact the listing agent that I like to pay $$ is that going to work?  If no response I will move to another property.  Things people judge $/sf, cap rate and cash flow. If you make near what the marketing avg you are in the middle. So there are a few higher or one way way higher blow up past stats in this market.  That is the one seller will accept.

In this area to be successful, all listing prices are fairly low and that brings up number of offers higher than you think. I think MF sold/asked is like 115% often done with cash, no inspection.                              

I realize that the deadline for this deal has passed so this will be more useful for future deals... Most sellers placing restrictions on the dates when they will accept offers are banks or other institutional sellers, they are not known for being flexible or even logical at times. If they wait to review offers until the dates they specified and yours has already expired then they cannot accept it even if they want to. In these type of situations it’s best to play by their rules and make an offer you are comfortable with and not change it when they come back asking for more or telling you they have multiple offers. As another poster mentioned you may have to offer on more properties but you won’t overpay and you won’t miss out because your offer had expired.

You could also just resubmit your original offer if you are comfortable with it, that way it is no longer expired and they can accept it if they want to.

Could be playing you against yourself, or could be bureaucratic rigidity. It is super easy to feel emotional about this stuff. However, imagine instead of a mom-and-pop owner on the other side there is this company that has an exact process they have to follow. They told you their rules and then you tried to get them to answer before the time they said they would. They are working on the schedule they laid out. He didn't say "would you put in more?" he asked "are you interested in putting in a bid?" What's more important, getting the other side to do it on your schedule, or getting the property? Your call.

I agree with Aaron and Amanda.  It may well be that in preparation to review offers with the seller, the listing agent just wanted to know whether the OP was in or out, since the offer was no longer valid.  The seller's agent was upfront regarding the process.  So much drama.  This is real estate, not the Real Estate Housewives.

@Burt L. I wouldn't waste energy trying to guess what is going on in the background. They may have other offers higher than yours, other offers lower than yours or no other offers. They will not and cannot share those offers with you.

If you think they have no other offers, then I would resubmit a lower offer.

If you think they have other offers, then I would submit my highest and best offer.

I have lost several bank owned properties because my bid wasn't high enough, but the offer was a number I was comfortable with. If someone is willing to pay more, it doesn't mean the property is worth more. In this hot market, people are overspending out of desperation.

Originally posted by @Burt L. :

I am running into this frequently and looking for a way to work around. In a strong local market, income properties are often listed in stating that offers are being taken for x number of days, and acceptance will be x number of days afterward. This drives me crazy as the listor is looking for more than the list price regardless of whether there are other competitive offers or not. 

On this 4-plex, I made a full price offer with no buyers side commission payable, title insurance and closing costs buyer paid,  no appraisal contingency, and sent a copy of bank statement showing more than sufficient funds for cash puchase (account number redacted) with a 12 day closing and an inspection clause. I made the acceptance date prior to the end of the timeframe offers were being accepted to see if it would be taken, and there was no response- as suspected. 

The end if the period for taking offers is end of business today and I have a message from the broker wanted to see if I am interested in the property, ignoring the fact I had already submitted an offer, which deadline has passed. 

At $700K with no buyers side commission (representing myself as I now do) and title insurance closing costs buyer-paid, I was already $20K higher on a net sheet to the owners- and still they are looking for more on a new offer. 

How can I break through this ongoing approach of trying to get me to out-bid myself? I dont know if there are even any other bidders, though it will be insisted that they exist. I would like to ask for a copy of the other offers, with entities redacted, but the broker will claim to be offended by this. Some brokers will even say that they had so many offers that they are asking one more time for highest and best to bring it further up, with no evidence that such offers exist. 

How can I find out what they really need to make this work, without the exercise in salesmanship? Broker has left a message asking if I am still interested - while ignoring my first offer - with the end of business today being a deadline for offers. I'm trying not to build resentments. 

 You can't get emotionally wrapped up in the offer.  It will kill you.  Make the offer  you're comfortable with and then move on.  If it comes back and needs to be tweaked, then you're in the game.  If they come back with stupid questions after the deadline has passed, like others have said, reduce your price and make another offer.  If they bite, you won for less money.  If not, you didn't have it anyway.

One girl's two cents

Best of luck

Stephanie

I sent another offer before the deadline, adding 5K. Spoke with the listing agent, received rent roll and will know shortly - we will see how the Housewives saga concludes. 

I will look at having my attorney draft a an escalation clause for future use as I probably just gave away 5K, but its a strong property. I really like the ability obtain a copy of another redacted offer, instead of pulling offers - real or imagined - out of thin air.  

I would have submitted a lower offer. Hard not to get emotionally attached but you can’t or you’ll pay too much or you’ll end up buying properties that drain your cash flow.

I’ve seen several times escalation clauses just make you pay top dollar as agents refuse to show other valid offers (that likely were never legitimate - verbal from uncle Ed) That’s a slippery slope that doesn’t help you, only the seller!

If it’s a great deal you’ll make out fine as $5k won’t break you, but lowering by $5k puts you in control not the agent. If you loose it, it wasn’t meant to be so move on. There are plenty more deals out there.

Truth be told I’ve overpaid on half of my 7 deals so I’m working on this discipline.

@Burt L. Man, submitting offers on properties in a hot, highly competitive market is like pulling teeth. You have all cash and are willing to pay a full market price while giving away some $20K in BA commissions and closing costs. Why not take $1,000 and do a mail out to owners of all 4plexes in the surrounding areas? Invest in an oversized postcard to make sure yours stands out.

Tell your story in that post card:

"I am looking for a 4plex in this XYZ area. I have cash to pay in full for your building. Loan qualifying and appraisals aren't going to be an issue, unlike a regular sale. I can close quick. I am willing to pay a  market price so it's fair to both you and me. I will even pay ALL your closing costs IF I really like your building and the cash flow it generates. You'll save 6% ($30,000) in realtor commissions if you sell directly to me. I'm ready to buy NOW. I'm mailing this postcard to 200 fourplex owners in town. The only question is - will it be your building that I'll purchase?  Call me at ... and let's chat."

Heck, wholesalers mail to reach homeowners in HOPE to buy their properties at a big discount. It's worth a shot to tell the owners of 4plexes in your target area that you're a bona-fide buyer willing to pay full price.

As on many multi-unit properties, there is no showings until under contract on this one. Property is now under contract by myself, probably at least 5K higher than necessary. So hard to tell if other buyers are real or pulled from thin air. 

Hope to find some things on inspection to bring the purchase price down that will cost less to remedy.

I have liked the idea of doing mailings directly and removing many of the transaction costs. We'll see how the inspection goes,  or as was said at my old power plant job- As the Turbine Turns. 

MLS deals without the offers being held until x date are much more straightforward; these are my least-favorite format and do remind more of lenders offering foreclosures. Now I get to see the interiors of property.

Burt I know what you mean.............for my part the stuff that is on the MLS today is too competitive and I have only seen one deal that worked well in the last 12 months-the rest were rejects; and I did not compromise. The last thing I want is to be scratching my head in the not too distant future saying 'what was I thinking.........why did I do that ?'

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