Need advice on a real estate sale - house might sell above asking price

[Lewis Clark]

We have had small bidding wars when selling two different houses. In our case, we had used a realtor both times.

What we did each time, based on the realtor's recommendation, was to go back to each of the parties and tell them that there were other offers, and asked them to come back with their best offer by a given deadline. We then chose the best offer for us.

Of course, the "best" offer is a combination of selling price, preferred closing date, cash purchase versus mortgage, contingencies, and so on.

In both cases, we were in a hurry to sell, so we set the initial asking price of a bit on the low side, which generated a lot of interest. And in both cases we ended up selling slightly above the original list price.

 

[RISP]

Many thanks for all the good advice in this thread. This has really been very helpful for me. I'll report back in a few weeks when the deal is done. Fingers crossed!

 

[Maidensong]

I'm curious about why you decided not to use a realtor. If you had, they would have provided a buffer between you and the buyers and made your decisions much easier. I was a realtor when we lived in Wyoming, but when we moved from Boston, I wouldn't have dreamed of selling our place on my own. Every market is different, and the laws vary from place to place. Our agent held an open house one weekend and let all the prospective buyers know we'd accept offers on the following Tuesday. She brought us six written offers (if it's not written, signed, dated & accompanied by earnest money, it's not a real offer). We took the one that was $60K over our asking price, but not until after our realtor verified the buyer's ability to perform. She also made them sign a document promising to pay the entire offered price even if the property didn't appraise for the amount. (It didn't, but they ponied up the extra!) A good realtor is more than worth their fee.

 

[RISP]

I'm curious about why you decided not to use a realtor. If you had, they would have provided a buffer between you and the buyers and made your decisions much easier.

First off, they weren't really my decisions, but the owner's. In a way, I acted as their realtor.

Second, my experiences with realtors are very negative. Unlike almost any other profession in Germany, it is hardly regulated at all. Anybody can call themselves 'realtor' without any qualifications or credentials. That shows in the kind of people drawn to this kind of work - most are useless. Still, they all charge very high fees.
During this sale as well as the last I handled, several parties complimented me on the quality of the exposé I wrote, my short response times, and the overall 'pleasentness' (not my words!) of the process. They all agreed that dealing with me was way better than with a pro, and they appreciated not having to pay the outrageous fees.
I believe that this allowed me to get a better price than a professional realtor would have.

A good realtor is more than worth their fee.

In some circumstances, like when you're selling in a remote location or a slow market, this may be true. But not in a crazy sellers market, when I have the time and skills myself.

 

[Maidensong]

I'm surprised at the lack of certification for realtors in Germany. I had to take extensive classes, pass background checks and a number of timed tests. To keep a license, I had to take continuing education classes.

Perhaps you were better off overseeing the sale yourself.

 

[Texas Proud]

I'm curious about why you decided not to use a realtor. If you had, they would have provided a buffer between you and the buyers and made your decisions much easier. I was a realtor when we lived in Wyoming, but when we moved from Boston, I wouldn't have dreamed of selling our place on my own. Every market is different, and the laws vary from place to place. Our agent held an open house one weekend and let all the prospective buyers know we'd accept offers on the following Tuesday. She brought us six written offers (if it's not written, signed, dated & accompanied by earnest money, it's not a real offer). We took the one that was $60K over our asking price, but not until after our realtor verified the buyer's ability to perform. She also made them sign a document promising to pay the entire offered price even if the property didn't appraise for the amount. (It didn't, but they ponied up the extra!) A good realtor is more than worth their fee.

Almost every time I have dealt with a realtor it has been either poor or bad... lucky for me I have only dealt with them 3 times... twice selling myself....


I had one who was worthless... had her to sell my first house and buy my second... she did not find me a single house that met what I was looking to buy... I had to do all the research and then ask her to show it... she would push houses that she was listing agent on even though I told her I was not interested... she did get my money though as I did buy a house using her... and one she listed, but at $30K less than what they were asking and she kept telling me was a deal...


As to the one she was to sell, she did NOTHING... zip, nada... the one offer that came in during the first few months was not given to me for 3 weeks... now, it was during the financial crisis but that is just bad business... got rid of her and the new one was better but she wanted me to put a bunch of money into the house and then stage it at a cost... heck, the house was a bit over $110K so who is going to do that? But, got an offer and sold it.


The last sale was my mom's condo... sold by me... saved over $6K and it was a pleasure to deal with the buyers... a RE agent would not have added any value at all...

 

[2177V]

Cash is King

Disclosure: I had a RE license which had expired.

I was shopping for a single family home in California and I saw one for $499K which was below the market value. There was a lot of open house traffic and high interest in this house mainly because of the quiet neighborhood and the in-ground swimming pool and spa. There was a wonderful backyard facing north which means the backyard is in the shade of the house in the afternoon. I did a lot of research and I offered $535K cash because it was the highest price that I was willing to pay.

I got the house. There were 10 other offers including an offer for $540K and $545K but they involved a bank loan and splitting the commission with a RE agent representing the buyer. I represented myself so the selling RE agent would get both commissions. A bank loan means the other 2 buyers require 1 additional month to close while I can close almost immediately. Cash is king. I got what I wanted. The seller got a quick sale and did not have to risk waiting 1 month for the bank to fund the other buyer and the selling RE agent received both commissions.

The main point: RE involve many many factors. However, as a seller, I would let as many offers come in. This may involve many open houses. The additional open houses and additional time are usually worth it...in a seller's market.

FYI: My prior house was free and clear so I took a $400K HELOC on it. I also had $135K in a taxible mutual fund account. Afterwards, I sold my prior house which eliminated the $400K HELOC loan. I always recommended people get a RE license and work part time over the weekend to get some experience. The pay is low but the experience that you acquire enable you to get a house of your dreams later in life.

 

[euro]

Good to know. Guess I should be prepared for that possibility, too...

I think the right way to handle that would be to insist on them giving me a specific figure rather than "best offer +X"?

Why? The "best offer +X" will always be your best offer (purely based on money). That said, those offers usually go as follows: "best offer plus X, up to $YYY". So, unless there are other reasons not to like that particular buyer/offer, I'd definitely accept those.

 

[euro]

... never mind: looks like the transaction already occurred. Day late - Dollar short

 

[RISP]

Update: We closed today for €610,000 (asking price was €580,000). All went well without any issues.

Thanks again for all the good advice in this thread.

 

[Ronstar]

Congrats!

 

[karen1972]

Congrats!!! I actually find the multiple offer situations way more stressful than just a single offer. Good job managing it and not losing out on a good offer.

 

[harley]

Good point, of course money isn't the only consideration. Just the most important one probably. If I got two very similar offers, I would even suggest to my wife and her siblings that they should consider selling the house to the nice young family rather than the childless couple, all other things being equal.

My daughter just bought a home in the DC area where it is common to go 10% over list. In these cases sellers are looking for pre-approved financing and no contingencies. The sellers generally set a date at which offers have to be in and quickly decide. I would look for the surest offer to proceed smoothly rather than a more risky higher offer.

Hi everyone. Thought I'd piggyback on RISPs thread instead of starting a new one.

We are in the process of selling our townhouse by owner, and have gotten a fair amount of interest. We are requiring a pre-approval guarantee letter before accepting a contract, so there shouldn't be any real complications with that part. However, my DW (who is managing the process) really wants to sell to a nice young couple with a baby as opposed to the other couple. Nothing is wrong with the other couple, she just really likes the young couple. I'm assuming from what I've read here that there aren't any rules about who's contract you accept, even if one is higher than the other? I've done a FSBO before, but that was a single buyer who approached me, not us putting it out there for sale.

We don't really want to get into a bidding war situation, as we're happy with the sale price we set. If DW wasn't so enamored of the one couple we might go that way, but a few extra thousand isn't that important in our lives right now. I just want to make sure we're on the up and up.

 

[RISP]

Hi everyone. Thought I'd piggyback on RISPs thread instead of starting a new one.

You're welcome in 'my' thread.

I'm assuming from what I've read here that there aren't any rules about who's contract you accept, even if one is higher than the other?

It's your property; sell it to whomever you prefer.

 

[harley]

You're welcome in 'my' thread.

It's your property; sell it to whomever you prefer.

I thought so, but I know it doesn't work that way for rentals. Just making sure.

 

[Jerry1]

It doesn’t work that way for sales either. You have a lot of latitude, but be careful. It would be best to be able to point to some part of the financial terms.

 

[jfn111]

It doesn’t work that way for sales either. You have a lot of latitude, but be careful. It would be best to be able to point to some part of the financial terms.

+1
You can sell to whomever you want but you can't discriminate.

 

[ivinsfan]

+1
You can sell to whomever you want but you can't discriminate.

Remember sale price will become part of the public record, no avoiding that. In this day and age it's prudent to just let the money talk....

 

[2177V]

Offer #4 just came in at 30,000€ over asking!!

If Offer #4 is a all cash offer, then it is a no brainer.

Cash is king.

Story: I was a buyer and I came across a California house asking $499K. Beautiful one floor house, a bit small but the large back yard has an in ground swimming pool and spa plus the back yard has a nice patio facing north. This means the patio is shaded by the house in the afternoon. I knew the house was under priced because I had a real estate license that had expired. I offered $535K cash and I got the house even though I found out later that there were 3 offers in the $545K range but they were either contingency of a house sale or contingency of a bank loan. Cash is king.

 

[harley]

Hi everyone. Thought I'd piggyback on RISPs thread instead of starting a new one.

We are in the process of selling our townhouse by owner, and have gotten a fair amount of interest. We are requiring a pre-approval guarantee letter before accepting a contract, so there shouldn't be any real complications with that part. However, my DW (who is managing the process) really wants to sell to a nice young couple with a baby as opposed to the other couple. Nothing is wrong with the other couple, she just really likes the young couple. I'm assuming from what I've read here that there aren't any rules about who's contract you accept, even if one is higher than the other? I've done a FSBO before, but that was a single buyer who approached me, not us putting it out there for sale.

We don't really want to get into a bidding war situation, as we're happy with the sale price we set. If DW wasn't so enamored of the one couple we might go that way, but a few extra thousand isn't that important in our lives right now. I just want to make sure we're on the up and up.

Update: We really worked the FSBO thing. DW did an incredible job with Zillow, pictures, open houses, etc. We had a lot of interest, and a couple of offers, but nothing that went to completion. The FSBO thing really seems to throw people off, even though it isn't that hard. DW had even found a lawyer that specializes in closing FSBO sales. But he DC metro area is very diverse, and most of the interest we got was from people for whom English isn't a first language. And they seemed to really worry about not doing all this through an agent.

Be that as it may, we finally pulled the house off Zillow in Aug, and waited a month so it would show back up as a new listing. We went with an agent, although we negotiated an overall 4% commission. We listed the house last Friday, and got a contract tonight for $2K more than our asking price. We're thrilled, and a little pissed. She didn't do anything that we didn't do other than the MLS listing. But people just seem much more comfortable with the middle man, so we'll take it. We will basically walk away with the same amount we would have with the FSBO, but the buyer will pay significantly more. We were going for a win/win, but a win/not-so-much-of-a-win is still OK, as long as we're the ones in the win column.

 

[jfn111]

I just helped a young couple close on a FSBO last Thursday. The process was a pain from start to finish because the seller had last sold a house 30 years ago (or more) and wasn't aware of current laws and taxes involved.
It sounds like your wife was on top of things and she could have made it a smooth transaction for a buyer.
Most agents, including myself now, want nothing to do with FSBO's because we end up doing the work for both sides with no compensation from the seller.

 

[Moemg]

r, my DW (who is managing the process) really wants to sell to a nice young couple with a baby as opposed to the other couple.

Years ago when we were selling our house in New Jersey I wanted to sell to this nice couple with a baby . We gave them a good deal on the house and then they drove us nuts with crazy demands .We almost cancelled the sale .Years later our former neighbors told us how they drove them crazy .Don't be fooled by sweet young couples .

 

[RenoJay]

I’ve been in these situational. My suggestion is to remain humble and gracefully mention to buyers, “There’s been a lot of interest and I am requesting best and final offers from interested buyers by next Wednesday at 5pm.” Or something to that effect. Buyers are sometimes willing to go over ask, but they hate feeling like they’re being played off each other so having some rules around the process helps. If you get two substantially identical offers you can explain that to both parties and ask if they’d rather bid again or have you essentially flip a coin. I did this process with a business sale recently and had the price end up 80% above the original ask.

 

[CaliKid]

Update: We really worked the FSBO thing. DW did an incredible job with Zillow, pictures, open houses, etc. We had a lot of interest, and a couple of offers, but nothing that went to completion. The FSBO thing really seems to throw people off, even though it isn't that hard. DW had even found a lawyer that specializes in closing FSBO sales. But he DC metro area is very diverse, and most of the interest we got was from people for whom English isn't a first language. And they seemed to really worry about not doing all this through an agent.

Be that as it may, we finally pulled the house off Zillow in Aug, and waited a month so it would show back up as a new listing. We went with an agent, although we negotiated an overall 4% commission. We listed the house last Friday, and got a contract tonight for $2K more than our asking price. We're thrilled, and a little pissed. She didn't do anything that we didn't do other than the MLS listing. But people just seem much more comfortable with the middle man, so we'll take it. We will basically walk away with the same amount we would have with the FSBO, but the buyer will pay significantly more. We were going for a win/win, but a win/not-so-much-of-a-win is still OK, as long as we're the ones in the win column.

It seems like a win/win because the buyer was comfortable with the process so it was win for them. The price isn't the only thing that matters to some people.

Also, it seems to be me, if you had just gone with the professional in the first place you wouldn't have wasted money the last few months. So would have been a bigger win/win if you just hired them in the first place and not wasted your time. However, live and learn I suppose.

 

[pb4uski]

We have done 5 purchases and 4 sales. Three of the 5 purchases were FSBO and 2 of the sales were FSBO.

I prefer the FSBO process.... mostly because I don't see the agents adding value to the transaction commensurate with what they receive in commissions and I prefer dealing directly with the other side rather than through an intermediary with a bias.

That said, our most recent sale of my Mom's Florida home through an agent, the agent was knowledgeable and did a good job and gave us some good advice.... but I'm not sure if was worth the $9k that we paid in commission.