I haven’t actually been asked that question yet, but I feel it is only a matter of time before one of my client’s offers their future progeny in order to get a home.
Buying a home these days can feel like an insurmountable challenge
I say “these days” but it has been going on a while.
Back in February, 2012, I wrote an article about how to buy a house in a seller’s market and it still holds up pretty well four and half years later! Mind you, I wrote it on February 29, 2012, which I think means it has technically only been a year and half. Damn leap years ruining my prognostication bragging rights.
One of the most common questions I get from my buyer clients is “How much is this property going to sell for?”
It is a tough question to answer, in part because one of the hallmarks of our seller’s market has been the increasing trend to holding back offers for properties.
This means that the property is listed, typically on a Monday or Tuesday, and in the agent-only section at the bottom called Remarks for Brokers, they tell agents how they want to handle offers. Let me break down the four most common phrases.
Offers welcome anytime.
This phrase means that the seller has decided to go with a list price that they think is fair, rather than underpricing the property and hoping for lots of showings and lots of offers.
When I read this phrase, it indicates to me that my client could likely buy this property at the list price, or pretty close to it. It also means that we need to move quickly as we may miss out if we don’t see it before someone else submits an offer.
This phrase doesn’t guarantee you won’t be in multiple offers, but the seller has at least indicated the price they would like and that they will likely accept an offer close to that price.
Offers reviewed at X time on X date.
This phrase means that the agent is holding back on reviewing offers. They don’t want you to see the house, write up an offer and submit it. Instead, they want you to see the house, decide you want it, and wait until the time and date they have provided in order to submit an offer.
This is done to set up a situation where there are multiple offers coming in and there is a bidding frenzy that results in a sale price that is considerable higher than the listing price.
No pre-emptive (or bully) offers will be considered.
When this phrase follows a set offer review time and date, it indicates that they mean it about that offer review date.
You see, when a listing agent says that offers are reviewed at a certain date, they are expressing their preference. It doesn’t mean that a buyer’s agent can’t submit an offer whenever they want. Hence the term, “bully offer”, as the buyer isn’t listening to what the seller wants and is instead saying “I know you said you’ll review it then, but I don’t care, here it is now. Look at it or I’m not coming back.”
This phrase lets me know that we likely do have a few days to arrange a showing, but that it is likely to be sold for over the listing price.
Seller reserves the right to consider pre-emptive offers.
When this phrase follows the set offer review time and date, it is telling buyers’ agents that while we may have said a certain date, we’re open to receiving a ridiculously good offer before hand.
In essence, barring an absolutely fantastic offer with no conditions, we will wait until the date and time we specified. If you want to pay a significant premium over our asking price though, we might be convinced that it is such a good deal, we are willing to forego the planned time on the market and the hoped for multiple-offer situation.
The above four phrases are typically only put in the Remarks for Brokers section, which is only viewable on the Realtor version of MLS.
This can make it quite challenging for buyers as they don’t know if a property is fairly priced or under priced, if they need to see it ASAP or if they have a few days to wait, and if they have a chance of getting it within their budget or not.
Whenever clients ask me how much I think a property will sell for or whether they should bother with a particular place, I do a three stage analysis:
- I look to see if they are holding back offers. If they are, it is likely (but not guaranteed) that they have priced it below market value to encourage showings and offers. Some agents don’t grasp that holding back offers isn’t a guarantee of offers over asking price, particularly if they priced it too high for such a result.
- I look at what similar properties in similar areas (same street or building) have sold for recently. This gives me an idea of whether the asking price for the home is a great deal, pretty typical, or over priced.
- I look at the property as a whole and see if it ticks off every box in terms of attributes. A home with everything you could want appeals to more people, which means more offers, which means a higher likelihood of a frenzy and a high sale price compared to the asking price. A home that is missing a few key attributes or has cosmetic challenges won’t appeal to everyone and the sale price is less likely to be significantly over the asking price.
By doing this assessment, I am able to give my clients a good idea of what will happen with the property and whether it is a possible option for them.
I never want to discourage my clients from placing an offer on a home they love, but my job is to help them actually get the home, which means having a good handle on whether the property will be priced out of their budget when offers are reviewed.
I occasionally hear about buyers who have bid on homes many times without success. In those cases, I think their agents are doing them a disservice by getting their hopes up again and again. In a seller’s market, it is understandable that buyers wont always get the home in a multiple offer situation, but if it has happened a dozen times, then the agent isn’t providing good advice.
If you or someone you like is looking to buy a home and you want an agent who respects your time and emotions, please get in touch. I’d love to be responsible for what comes next.
The wooden floor, and the wooden floor with a carpet on it are both rather uneven compromises. The bare wooden floor is too bare, too hard to be comfortable; but not in fact hard enough to resist particularly well if it is left uncovered – it scratches and dents and splinters. And when the floor is covered with a carpet, the whole point of the beauty of the wood is lost.
Flooring is one of the most common elements changed when new buyers move into a home. Whether it is removing carpet that is stained or contains allergens, installing or refinishing hardwood or replacing tiles, flooring is a common project for my clients to undertake.
This lesson points out that we should consider high traffic and more public zones when considering flooring. Rather than putting hardwood floor throughout, use more durable materials in high traffic areas so it will wear better. Anyone who has a scuffed and damaged front entrance or kitchen floor knows that wear and tear is inevitable and a gorgeous wood floor only remains attractive for a bit before being covered up due to damage.