With the market heating up, we are seeing multiple offers again. Exciting…if you are a Seller! Stressful and confusing... if you are a Buyer. Fortunately, here at Yaffe Real Estate, we have over 20 years of experience and we know how to handle multiple offer situations on behalf of our clients. Remember the run up in the mid-2000's? We did many multiple offer deals on behalf of our Sellers and Buyers.
So, let's look first at multiple offer situations from the perspective of representing a buyer.
Recently, a client of ours was in a situation where he lost out on a contract for a home in a multiple offer situation. Multiple offers came in on the house and the winning offer (which was not our client's) removed the inspection and appraisal contingencies, taking the home "as is."
The Background
The Seller was an investor who had purchased an older home located in a neighborhood of newer homes and flipped it from a $230,000 purchase to a $375,000 sale in a short period of time. Despite the increased sale price, it was still an older home and needed to be fixed up, but the Seller refused to provide inspection reports or any receipts for any repairs or upgrades. So ultimately, the Buyer who won the contract had no idea what quality of work they are getting or how much they will need to invest in the home.
What We Advised
We advised our Buyer to walk away. In this particular situation, the house was older and the flip time was short, so the uncertainty regarding the quality of work made a huge difference in how we advised our client. Sometimes, we will advise a client to waive appraisals, inspections or contingencies but this was not one of those situations. There were too many unknowns and too much risk so, although we had a lot of time into this potential deal, it was best to walk away. We will start over and find another home that is better for our client.
Our Take
Sometimes you need to know when to walk away. We know that most other agents would have moved forward and collected a hefty commission in a short period of time. But we are not "most agents" and our number one priority is to "do right" by our clients. We take a long term view and try to preserve and maintain our client's trust in us at all costs. We take this trust seriously and, therefore, our mission is to be honest, transparent and knowledgeable at all times. Even if we have lots of time into the deal; even if it is inconvenient; and even if we don't feel right about the deal, we will advise our client to walk away and start over.
Other situations
This particular deal warranted walking away. However, there will be multiple offer situations where we encourage and support our Buyers to "go for it." In those cases, quicker settlement times, larger down payments, waiving certain contingencies and using escalation clauses can help our clients compete and win so that they get the home of their dreams. We weigh the risks against our experience and the Seller's situation to decide when to play and when to walk away.
If you are considering buying a home, contact us first. Let's see how we can help you compete and get into the home of your dreams.
