The market’s just as crazy here in greater Tel Aviv - I just spent the equivalent of $750,000 on a 3-bedroom, 1000-square foot condo in one of the city’s suburbs, and I got a great deal. And yet, I still paid about $30,000 below the asking price. If the sellers had told me that someone else was offering more, I would have laughed at the poor sucker and kept on looking.
Depends on the market.
I remember seeing a documentary (sorry, no link) about the crazy days of Silicon Valley. People would put their house on the market and have an open house and be left with literally dozens of offers on the spot on the first showing.
If 20 people want your house it is not rocket science to figure the people low-balling will lose out.
When you low-ball a dozen times and lose a dozen times you start to bid over asking price.
Sometimes list price is just a number. Realtors were pricing houses to ensure a bidding war; everyone knew it going in. Even so, at the hottest part of the market the bids coming in were amazing. Our realtor sold a house for $250K over asking, and the first time the buyers actually saw the house was during the closing walk through.
We were waiting on line for several open houses to start when the realtors came out, put an “Under Agreement” sign up, and told everyone to go home. Many houses sold while the open houses were still going on. People would put in high offers that expired in a matter of hours, and sellers would snap them up.
Both times I bought and sold (2 each) I met the buyer/seller. I have never heard of this “rule”.
Last year we were looking for a house near Oceanside California. Any fair house was getting offers the were over asking. On the house that we ended up buying there were multiple offers. The house went on market on a Tuesday with appointment only showings (Covid no open houses). We looked at the house on Friday about 2:00 in the afternoon. The selling agent told our agent that she already had 5 good offers and that she would be sitting down with the seller on Saturday at 5:00Pm to go over the offers. We had lost out on a few houses by being over bid. So, our offer was $60,000 over asking with an escalating clause of up to $80,000 over asking. We got the house at $60,000 over asking.
Back when I was selling my old place, if someone had bid over my asking price, I would have understood that to mean that I had been asking for much too little, taken it off the market for a couple of weeks, and then re-listed it at a price significantly higher than the highest bid. But I suppose cultural factors are at play here, too.
You might find when you put it back on the market at the higher price only a few people will look at the house and you might not get any offers. This house if it was put on the market for $780,000, I would have figured it was overpriced to the neighborhood for the neighborhood. Along with the fact that all houses in this area were getting over asking I would have figured it out of my asking price.
But after looking at the house we loved it. And were willing to pay as much as $800,000 to get it. But were not sure that anyone else would go that high. So, our offer $780,000 with an escalator clause up to the $800,000 and we got it at $780,000. For the neighborhood we may have over paid. Biggest house on a very large lot. But for us it is not an investment but the last house we will buy. We could have gotten a smaller house for a lot less money then spent $200 to $300 K to make it the house we wanted.
Had the reverse problem selling our old hose. It was the largest house in the neighborhood, 2100 sq ft in a neighborhood of 1000 to 1500 sq feet houses. With AC, large spa and a lot of extras. We started asking $1.2 M got a few lookers. But the house around the corner from us sold for $930K. We had to drop our price to $1.1.
As a side bar we got killed on taxes. 1st there was capitol gains on about $350K. Then there was $9009 tax because we made enough to be classified as self employed. Then because when filling our income taxes we had a large tax due amount the Feds finded us another $1,500 and the state fined us $600. And add on top of that Medicare next year will cost us about another $900 a month because we sold the house that we had lived in for 45 years.
The real reason is that when there is a mortgage involved, the bank has a representative at settlement. If buyer and seller have mortgages involved, there are two bank representatives.
So actually in a big city there are people whose job it is to be a real estate representative, they are hired by the lawyer or conveyancer, and they run the documents back and forth between offices and so they will book in for a bunch of settlements that day, and travel around the block or across city to attend settlements, drop off finished or aborted jobs, pick up new jobs, etc.
What happens is that the big banks have a days of week where they meet for settlements … so bank X send someone to bank Y on mondays, Bank Y may send someone to bank Z on wednesdays…
so basically just using a meeting room in a banks city office, or a dining table in a food hall somewhere, or a pub /bar table, or anywhere they choose, and the settlement people will come at a booked in time, and wait till they are called and try to settle. Now if the settlement is delayed for a few hours, the people from the banks may available, but available elsewhere?
Now what ends up happening is that one delay in a settlement , eg a wrong name on a bank cheque, can delay a chain of settlements. Because the vendor is buying another place, with the proceeds of the sale… they can’t buy until they sell, and so there can be a meeting arranged where the a bunch of settlements are queued up to occur…the time and location of the first settlement in the chain is passed back along the settlement people and they organise to form a group who wander around trying to get these settled in a timely fashion, as a group. Because like, the banks are just there on the same block, Group to bank X, group to bank Y, back to X, over to Y and then Z for two settlements and back to X.
right ?
Having “civilian” (non-industry) buyer or seller just makes it an unworkable crowd. The industry culture evolves to be the same in every big city… the agents make it their profession to get the job done ASAP, and that can mean carrying the file around for a few days. They know when and where the banks can do settlements, so they can make make agreements with another agent to reschedule the the settlement to a time and place the banks involved will most likely be able to fit them ( eg making use of a time slot vacated by a failed settlement…) They just want to get the most cases settled that day because they have a flat fee per settlement, if its not their own clients fault… if the bank makes the mistake, no extra fee, Because its their job to adapt to the banks having to reschedule . This happened for me one time, the bank had not noticed a new communication related to our settlement, and so at settlement time the bank had the wrong value of cheques, representing an overpayment to the vendor - something to do with a grant we received as first home buyers … the paperwork sent to settlement was for “with grant” and the bank chequeus were for payment 100% from the mortgage, no help with a government cheque in the payments… Well if the cheques had been to a city lawyers account, the lawyers could have got a bank cheque to immediately refund the overpayment, but as the vendor was a government department , the overpayment was going to their account,and they didnt have a way to get a bank cheque done in that time frame. But we trusted them when they agreed to repay the overpayment promptly, the mortgage interest on the overpayment was only a few dollars a week. Its just an example of how the agent was able to delay the settlement until later that day… because he only had himself and other agents to worry about, he didn’t have to coordinate with “civilians”.
I don’t think you have it right. Escrow offices are used in the United States. The seller goes to the escrow office and signs a bunch of papers. Papers to release title of the property. Papers that will direct where the proceeds of the sale will go to, that is to pay off any mortgages, and bills against the property, and if there is any money left over where the seller wants the money sent.
Then the buyer goes to the escrow office to sign a bunch of papers. These papers will also be about collecting all the moneys due for the sale. That is the amount that will be recieved from the bank and the down payment from the buyer. After the escrow company receives the money from the bank and the down payment from the seller the escrow company will then transfer money to pay any outstand mortgages and bills and what is left over the escrow company will send to the seller.
If there is a line of sales waitning in line each is handled separately. After the seller receives his money he will let his agent know that he can close on the house that he is purchasing. The he goes to escrow company when they are ready form him.
Each sale is separate and would be handled separately. The banker’s would never have to leave their banks to meet with each other.
That is the job of the escrow companies, an independent 3rd party.
I know I could word this better but it is late and I am going to bed next.
When I bought my apartment a lawyer representing the bank where I had obtained my mortgage and a lawyer representing the bank where the seller had the current mortgage we’re both present at the closing.
Along with my attorney, the sellers attorney and the attorney for the co-op apartment building. The closing costs were astronomical.
All the settlements were handled at closing. The team of lawyers figured out the exact amounts of money that were due each party, all the last minute adjustments were made, and the bank lawyers and the lawyer handling the escrow accounts filled out the checks and distributed them.
We did all that at the lawyer’s regular office. One of the things the lawyer was being paid for was filing things properly with the county or wherever else they were supposed to go. There were at some points deposit funds held in escrow by lawyers, but I don’t remember anything called an “escrow office.”
Of course, it’s the US, so things might vary quite a bit depending on what state you’re in.
When I closed it was at an escrow office. I think that is what you call it.
They clearly specialized in this process. As I was signing papers a person would collect the papers and tap at the computer. While we all did our bit that person at the computer was clearly the final arbiter of all that was happening. If they said something was not in order all things stopped until it got sorted.
This was in Chicago and I imagine there are a lot of such transactions happening that it merits a dedicated business for this.
I suspect it is not so regimented in different places.
You don’t mention lighting fixtures. I can remember a friend’s story where the buyer was expecting all the custom/expensive/unique light fixtures (i.e. those that were hard-wired – not just table lamps) to be conveyed. It was not mentioned in the paperwork, and they were pissed off and shocked on move-in day to find all those fixtures gone. I have a gorgeous old Moroccan brass/beaded chandelier in my bedroom that will definitely be coming with me if I ever move.
Also, I know most people around here (beach area in SoCal) do not require inspections. As mentioned upthread, offers including an inspection requirement are usually round filed immediately. But the market’s still crazy. A townhouse in my group of townhouses (5 per group, but it was an end unit) sold for $860K last June. I was shocked. Just checked zillow, and it’s now estimated at $973K.
In Michigan a title company usually handles the closing details like a title search and title insurance that the sellers pays for the buyer and the buyers pays for their lender.
Closings can happen anywhere but usually at the title office or the RE office. No one but the buyer and the escrow agent from the title com need to be present at close. But RE agents are usually present as well to make sure their commission is on the RESPA statement ( financial disclosures) 
.
I imagine an RE lawyer can do title search and closings too.
Cash on the spot is a big deal also - more sales involve it. I’m not sure about what lenders want these days. My last mortgage was 25 years ago in a buyers’ market and since we definitely did an inspection it wouldn’t have been an issue.
In my area 10% down would cover any conceivable repairs, so the lender would be good.
What state are you in. I’ve bought houses in Louisiana, New Jersey and California and have never heard of an escrow office. In Louisiana IIRC it was done in the realtor’s office, in NJ the lawyer’s and in California the Mortgage company.
Voyager
Both California and Nevada. In my latest cases the signing was really done in my home. The Escrow company gave me the choice of coming into the office or they would send a notary to my home sign. It was easier to pay the $20 and have the notary come to our house.
When we sold our 1st house 46 years ago we had a note on two light fixtures noting that they were not part of the sale and the owner would be removing then with the sale. That fact was included in our counter offer to the buyer. After we moved out the buyer had to be reminded that the light fixtures were not part of the sale. 45 years later when we sold again we avoided that question by replacing all light fixtures that we wanted before any showings.
In Indiana, where I am, closings usually seem to happen at a title company, which may or may not be quite the same as what some people are calling an “escrow office” (a term I have never heard).
A few years ago, when I sold my starter house and moved to a bigger house, I had a day that was all closings. In the morning I went to one title company with my realtor, and signed all the papers involved in selling my old house. The buyer was also there, and I met him at that time.
That afternoon I went to a different title company, again with my realtor, and signed all the papers involved in buying the new house. The sellers were there, and I met them at that time. The mortgage officer from my bank who had arranged the mortgage was also there, although he didn’t come into the meeting room where the actual closing happened, and I don’t think his presence was really necessary. I think he just dropped by as a sort “wish you well” gesture, which was nice of him.
My last two closing took place in a lawyers office. In both cases, the sellers all signed their pieces first. Later the buyers came by and signed all of theirs. We never crossed paths. The lawyers had handled all of the paperwork so the appropriate checks were cut and distributed.