So, we’re trying to buy our first house. We spent months looking, and finally found a perfect place. It’s listed toward the top of our price range (let’s call it X dollars). We realize that there is interest in the place, and decide to not mess around. We offer them X +10% for it.
They tell us that they have an offer of X + 20% already, and are we willing to match? We decline are reiterate an offer of X +10%, a very fair offer.
They call back and ask for X + 15%. Hmm, I think. Seems that their “other offer” may not be so much a real offer as a made up one. We reiterate our offer of X + 10%.
They pull the house from the market and relist it to make it look like it just went on the market, declining all offers.
For the love of crap, if you aren’t willing to sell the house for your asking price, then RAISE YOUR GODDAMN ASKING PRICE IN THE FIRST PLACE. You wasted my time, as the house was apparently never in our price range in the first place. We spent a total of about six hours getting everything in place for our offer, for no apparent reason. I wouldn’t complain if they had a better offer, and took it. But they didn’t (and even if they did actually have a better offer, they didn’t take that one either!).
You can’t do this in any other business. Grocery stores can’t list cereal for a dollar and then refuse to sell it unless you pony up two dollars. Why is this all right in real estate.
That’s all right, if they haven’t noticed, prices aren’t exactly looking sturdy right now. I won’t be macho, and say that I’m done with you. Next week, you will get my offer: X + 5%.
Dunno where you are but in my area this was completely normal a few years ago (probably still going on) - underprice a home in order to get multiple offers, everyone assumes that there will be a flood of competing offers so they’d better go WAY over asking price (and thus higher than what the house might sell for otherwise). You get 20 or 30 people bidding on a home with predictable results.
I remember one home that I bid on that went for 30% over asking. That was a 2-bedroom, 1 bath place in nice shape in a decent area. Nothing to write home about, just “nice”.
The realtors involved in that ought to be taken out and spanked but in some markets selling a home is still seen as a license to print money so there it goes.
Good for you for holding to your price. You will find a place but it’s a sucky process.
Also, I have no problem with this per se. If you can get dumb people into a dumb bidding war, more power to you. But, when the smoke clears, and one offer is the highest, and is higher than your asking price, you should HAVE to take it.
Is this a San Francisco thing, because I’ve never seen it in Chicago or Birmingham. We got our places under the initial asking price at both, and wouldn’t have considered going over asking with our bids. In both cases, we were pretty lucky with the people we were buying from, one was a idiot and the other were extremely nice, so we didn’t ever feel screwed.
Good luck, fiveyear finding a place. Hopefully this tool will get his in the end.
We went through a similar thing with our current house, though not as dramatically kleptomaniacal.
Rule of thumb: Whatever the seller and agent tell you is a lie. Real estate agents will lie about the local market, lie about the house, lie about the area, lie about other offers, and they’re really lie about what you can afford. Other offers, as likely as not, either do not exist or are far less lucractive as they would have you believe.
Unfortunately it is up to the seller - until you have it in writing that you agree to buy for $X and they agree to sell it to you for $X, all you have done is make an offer. There are sellers with unrealistic expectations - they have a lot of emotional capitol invested and don’t see why everyone else doesn’t value their home as much as they do.
I remember looking at a place over in a very nice area of Oakland that had been on the market for a while. It was good-sized, nice neighborhood and had been totally remodelled - foundation, roof, interior, gorgeous kitchen, you name it. Only problem is that it’s located directly underneath some big power lines (you can hear a faint buzzing sitting in the nicely landscaped backyard). Sat there on the market not selling, price dropping. The sellers had put something like $150k into the remodel alone and they could not stand the idea that they wouldn’t make it all back on the sale.
There are even some sellers who aren’t really serious & realistic about selling - they’ll put a home on the market but they secretely want a million bucks for a small house and they will not take anything less. Don’t waste your time on them.
Yeah, the SF Bay Area housing market, while it has calmed down a little recently, is still mind-blowing compared to most other parts of the country. It is pretty much standard to see multiple offers on any decent property, all over the asking price (which like I said is often intentionally low to stimulate a feeding frenzy). I bid on one place where I was one of 12 bidders, and I remember one a few years ago that had 52 offers on it. The 30% over offer I mentioned in my previous post was on an asking price of $300k, it went for $420k. The home that I finally bought I bid about 15% over asking, had almost zero contingencies on my offer and I was one of 6 bidders.
This is in an area where the median home price is nearing $600,000 and we’re not talking about mansions.
It’s not a pleasant experience for buyers - you need to spend a lot of time researching and getting an idea of what “reasonable” (by the local market standard) prices are, know what you can afford and stick to it.
What the sellers want, really, is all the advantages of an auction (people bidding against one another), with none of the transparency or other potential drawbacks (i.e., having to take the best offer, as long as it is over the reserve price).
One thing that i noticed about real estate when i first moved to the US is how infrequently auctions are used as a method of selling real estate. In Australia, especially in Sydney, auctions are a pretty common way to sell houses. The seller sets a reserve price (which is unknown to the bidders), and if the bids go over the reserve, the house is sold to the highest bidder.
I have no problem with the principle of asking potential buyers to compete with one another for the property, but the underhandedness and dishonesty of the situation you describe would be pretty frustrating.
The bobble is bursting here in Minneapolis. There are a record number of homes on the market, and too few buyers. Each time interest rates are raised by a 1/4 percent, some realtors are realizing that the price of the house must drop by the amount of that 1/4 percentover a 30 year loan just to stay competetive.
It’s calmed down A LOT recently. Still a bit insane (the words “fixer upper” and “one million dollars” should not be uttered together in the same listing), but the fact that these guys tried to start a bidding war and no one bit on it means that stuff is getting much more reasonable.
We’ve been trying to buy a place for about a year, and it never looked possible until the last month. The “time on the market” are completely fake. We’ve seen stuff that’s been on the market since November, but it just gets relisted every month or so, so that it looks fresh.
I’m not saying that the bubble is popping, but there is some air hissing out of it.
Of course, if you wanted to fight unethical fire with unethical fire, you could have a friend offer x-10% to soften the seller up a bit before your bid. But it’s probably best to just walk away.
Og knows I’m not looking to buy, but I’ve been quite curious about RE in general lately. The bubble hasn’t popped yet here either, but from I’ve seen and read, it’s hissing quite nicely.
Our prices are just as inflated as San Francisco’s, whether it’s a condo or a single-family or multi-family. My state, in fact, has the dubious distinction of having the largest population drop two years in a row. There are houses in my neighborhood that’ve been on the market since last summer. A couple from even before then.
Our next-door neighbors were a case in point: Your typical foursquare with a finshed basement, central air, and other updates. Last spring they listed it for 489K, which isn’t unheard of around here. No nibbles. They then dropped the price to 480. Still nothing. In the meantime they put a downpayment on a house out of state, so it was imperative they sell this one ASAP. They kept decreasing the price and finally had an offer in the 415-420 range. They signed. They were pissed beyond belief.
Part of me doesn’t blame them for all the updates they did and wanting to recoup, but man, the size of the total drop… :eek:
We put an offer on a house this morning. Now we wait.
Our problem is the opposite- the house is now £12,000 over the original asking price, and it got there in just 7 days. We’re looking at a high demand area and few houses stay on the market longer than 2 weeks. The vendor is thrilled to bits with what he’s likely to get and is happy to sell now, but there are 4 other interested parties bidding, and so it’s a matter of whether anyone will match or exceed our offer.
Still, the moral of the story is that if your house is worth more than the asking price, you’ll get it, and if it isn’t, you won’t. It’s only worth what someone is willing to pay for it, and if you’re not willing to sell at that price, well, don’t pretend you are.
Here in New Orleans we are experiencing a market geared toward sellers because of the hurricane. When I bought my house in 2001, we came in at $10,000 under asking price plus requested repairs to some minor issues. When the seller balked, we threatened to drop the offer and the seller made the repairs and agreed to our price. My Uncle’s house sat on the market pre-Katrina for 6 months with three offers which all fell apart. After Katrina, he had 7 offers in one day and the house quickly sold. People are throwing serious insurance money around inflating the market. The wife and I are about to sell and get out of the area so I’m hoping it goes on for awhile.