Multiple offers?

Question

Do most of you guys putting offers in on places to rehab or hold, put in offers on multiple properties at the same time? If you do, how do you manage to get out of multiple acceptances at the same time?

J Scott · Answer

If you're only putting the due diligence in their as an opportunity to back out (you don't need it otherwise), why not 3 days instead of 10?  It will make your offer more attractive.

As for letters of intent.  Most agents won't take them seriously for residential property, and therefore the seller won't take them seriously.

J Scott · Answer

If you're offering on REO properties, the seller won't just accept the offer.  They'll come back with a verbal acceptance, at which point you'll be asked to sign some additional contract docs (addenda).  If you don't sign those docs (for example, if you already found another property), you're never under contract.

If you're buying from a private seller, you have two choices:

1.  Make one offer at a time with a short time frame for response;

2.  Include a due diligence contingency that will allow you to back out for any reason (including just not wanting the property anymore).

Keep in mind that your agent may not be thrilled with you doing this, as it makes him/her look bad if you consistently back out of deals, but legally, that's how you deal with the situation.

Chris Calabrese · Answer

I usually try to time the counter-offers so that I have time to cancel one if another gets accepted.  You pretty much know that your initial offer won't be accepted (if it is, you're offering too much), so there is some wiggle room in the counter process.

I also prioritize properties and adjust my offers accordingly to increase my chances of getting the ones I really want.  Once you have experience in your local market, you will almost know what will be accepted and what won't.  At least that seems to be the case here.

Mike Austin · Answer

Curious on these multiple offers.  Are you actually looking to purchase the property or assign it to someone else as a wholesale deal?

Kyle J. · Answer

Cody,

In regards to your question about due diligence periods, the default length on the California Association of Realtors purchase contract form (which is what my offers are written on) is 17 days. However, you can write in whatever length of time you want instead.

Mine are generally written for 10-17 days. The length of time isn't a huge concern to me though because I've never backed out of an accepted contract. Sure, problems come up with the houses from time to time. But I factor that into my offer since I expect to have things go wrong or to find unexpected problems. I guess I'm lucky that I haven't run into a problem yet that was so big it was a deal breaker.

As a side note, J Scott's suggestion about making your contingency period shorter is a good one to consider. Anything you can do to make your offers more attractive and stand out from the others will help increase your chances of getting them accepted.

Kyle J. · Answer

Dell,

I have several different realtors that I work with in different cities. I give each of them one check made out generically to "Title Company". The checks are written out for whatever EMD I want to offer (usually $1000-$5000), signed, but not dated.

That one check is then used for all the offers I make with that realtor.

If an offer is accepted and escrow is opened, the exact name of the title company that is chosen (usually by the seller) can then be filled in on the check and it can be deposited. Or, like in the case of the house I'm in escrow in on now, my realtor just kept the check (to use on future offers) and I dropped a new one off at the title company to open escrow with.

Cody C. · Answer

I would probably in that case just make copies of one check, it's always made out to our firm, so the sellers wouldn't know it was in other offers as well.... My broker would NOT be happy about that however, and the seller could potentially sue me(the brokerage) for the 1000 if multiple offers were submitted and accepted, and the investor/buyer were unwilling to write me a new one. It'd be my license (potentially) on the line because I signed saying I received the earnest money.

Dell Schlabach · Answer

Interesting, are you requiring certified funds or a personal/co check?

So If I had ten offers in, I would have ten checks to my realtor at 1,000 each, thats 10,000. Doable, however very inconvenient.

Out of 10 offers I typically get 1-2 accepted. So I would be getting 8-9 checks back, interesting bookeeping headache.

Curious if rehabbers in other areas are submitting funds with every offer and our area is an outlier?

Cody C. · Answer

Dell Schlabach, Here in oregon, I always get an EM check from a client when I write their first offer. Generally this is 1000 here, or most banks (REO/shorts) like to see 1%(whichever is bigger). I actually have to sign (as the agent) that I received that EM deposit.

Now, I don't actually deposit it into our trust account, until I get an accepted offer, but I most certainly receive and sign for it.

Dell Schlabach · Answer

Binding offers, hmmm. We submit offers with proof of funds, almost always there are multiple counters before we reach an agreement. At the point of agreement we pay our certified earnest money.

There is only one reo volume reo realtor that requires certified earnest money with all offers in our multi county area. We dont submit many offers on his listings.

Is it typical in other areas to submit earnest money with all offers? wow that would complicate life.

Multiple offers?

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