Tips for Southern Oregon Multiple Offer Mania
Tips for Southern Oregon Multiple Offer Mania
Full Transcript of Video Below
Alice's Analysis_ 3 Tips for Multi-Offer Mania-Buyers AND Sellers Need to Prepare!
Well, good afternoon, Southern Oregon. Alice Lema here broker, John L. Scott with another podcast. And this episode is going to be super interesting. It is regarding multiple offers. We call it multiple offer mania, three things you can do to prepare, buyers and sellers both. So when we have a tight market than some price points are going to be experiencing more than one offer on each property listed.
[00:00:50] So when that happens, the sellers usually think it's really exciting and good. And the buyers think it's a drag. I'm here to say it's a double-edged sword, on both sides. So if you're a seller, then here's something you need to be ready for. If your agent tells you that it's likely that you're going to get a multiple offer situation that does not mean you want to raise the price.
[00:01:15] You still want to have a normal price. Okay because part of what you want to be careful of is having the price too high for the appraiser to validate. So one of the problems we have in these markets is sometimes you'll have buyers willing to, to write an offer really, really high, maybe even over full price, and then it doesn't appraise.
[00:01:39] And so the seller is left, you know, two, three weeks into escrow off market. And now you're dealing with this, this buyer who either can't make up the difference, won't make up the difference and you don't want to either. So the first tip is, understand your price point in your neighbor, and if you're a seller, be reasonable about it.
[00:02:02] So that any offer you accept is likely to appraise. Now tangent note, if you get cash offers, cash buyers do not get appraisals. This is partly how neighborhoods, climb up in value is cash buyers can come and pay whatever they want. And boom, that's the new comparable price for that neighborhood for six months.
[00:02:29] So, but that's also how markets go down and cash buyers frequently want to deal because they're not fussy financially. And they can close in three weeks. So, but anyway, our first tip is understand your market because of the appraisal.
[00:02:45] Now, if you're a buyer, then one of the things you can do to win the multiple offer situation is to come in with a little extra cash in your pocket and say, I'm going to offer this price. And in the event, the appraisal comes in low, I will pay as the buyer, I will overpay the first $5,000, first $10,000. And I know you you're listening to me going well, who wants to do that? Well, sometimes full price is the right price, a little over full prices, right price. Sometimes that is the right thing to do for your life situation in that market, in that moment.
[00:03:21] And I'll give you an example. We had a couple of kids, just 60 days ago and they lost five escrows. They lost five houses, but the sixth house they won and it was in part because they reached out to their family, something I'm famous for doing, getting those parents and grandparents on the phone saying, Hey, let's help these kids out. Let's give them a lifeline if they need it.
[00:03:45] And they got, they won the house. And in the, just the two months, since they bought their house has gone up in value, just because of the conditions of the market. And they got a great house. First time home buyers actually got something move in ready, that hardly ever happens.
[00:04:01] Anyway so first tip, whether you're a buyer or a seller is understand the appraisal price. If you're a buyer, try to have a little extra cash, so you can come in high and tempt the seller to pick you. And if you're the seller, try not to go too high because you just don't want to create a situation for yourself where you might have to go back on the market unnecessarily.
[00:04:24] Okay. So that's tip number one, understand the pricing of the neighborhood because of the appraisal tip.
[00:04:30] Number two is understand what else you can offer. Or what else you can accept besides money. So, if you're the seller money is great, but there's also what's called terms. So what if you got an extra week to move out after closing?
[00:04:51] What if you did not have to clean up your yard? What if you didn't have to paint the ceiling. You know, whatever it is, understand what your list of needs and wants are as a seller that a buyer could tempt you with. And you can either tell the people writing offers, or you could keep it to yourself and just wait and see what else people offer.
[00:05:14] But it's, it's kind of nice to tell them ahead of time to see who can accommodate that. Maybe you want a quick close. Maybe you want to rent back for a little while. Maybe you want them to haul the old car off for you, just whatever.
[00:05:29] Now, if you're a buyer, it's just the opposite. And we had some folks buying a mini farm in Phoenix before the fire. And, and it's still there, but anyway, they were buying this mini farm and it was kind of a pricey property, but it was at the height of the frenzy of our seller's market here in Southern Oregon. And they won over seven other bids because they told the elder family who had been there since time began that they would clean the yard.
[00:06:01] And if you know, some country folk, they they're collectors and they're collectors of nails and bailing wire. And cause they might need it some day to fix something. And I can say that because I come from a long line of people like that. I don't do that because I live in town. But, but if you, if you are bidding on a property like that, you can win the bid like these folks did is, they just said you don't have to clean up a thing we will do it all.
[00:06:29] Now the side effect of that is dump fees are high. You better understand what it is you're hauling. You don't want any surprises. You want to know if there's something with lead in it, asbestos, concrete, old tires, you still might make that offer. But as a buyer, you want to understand what your responsibility is going to be and how long is it going to take you to do that?
[00:06:51] Because the interesting thing about the couple that bought that mini farm was they, the husband had an active negotiation with the wife and she gave him a deadline and she said, okay, we'll go along with this. And you have to have it done in 30 days. So it's like a little side agreement.
[00:07:08] But they, they won, they won over all those other offers and the sellers were beyond happy because they were really quite elderly and their bodies didn't quite work. And so they got their needs met. The closing was very calm and quiet. And everybody got to move on with their life. So number two is understand what other terms can be accepted or offered.
[00:07:32] So if you're on the seller's side, understand what else besides money would ring your bells and, consider telling people that, or look for that in the offers when they come in one of the two. And as a buyer, size up, the folks, size up the property point blank, ask them what else can we do for you to try to win the bid?
[00:07:55] Okay. So that's our second tip is, find out what other terms besides money, we'll work to make the deal come, come together now. It's all always nice to have these conversations ahead of time. That's why we're doing this podcast is we want all the buyers and sellers to have these conversations with each other, and themselves and their agents ahead a time.
[00:08:17] Okay number three, when you have your multiple offers, whether you're the buyer or the seller, don't drag it out. I just had a situation in Grants Pass where the property went on the market and they, we were told there's likely to be multiple offers.
[00:08:33] Okay. So the first question is when are you going to open all the bids? When are you gonna open all the offers? And they said, well, we're going to leave it on the market for 10 days. Now that is an extremely long time to ask a buyer to wait. And as a seller, you better take note, buyers are sick of this, and there's a bunch of them that won't even write an offer anymore if it's that kind of a scenario.
[00:08:56] So you can lose really good buyers and offers by overplaying your hand if you're a seller. So have a very short window like four days, maybe two weekend and, and two business days or Friday to Monday or something like that. And, and get back to everybody, let them know, when the bidding is closed and then let them know when the award is going to be given and do it in writing.
[00:09:22] Now, if you're a buyer. Ask for this. Ask, how long are you going to wait? And then you decide if you want to play that game or not. You decide if that property is worth it. But I'll tell you something as a buyer, you should also keep looking. If they have a four day waiting period, you put in your offer, you get out there and keep looking because you want to know that you have a backup plan in case that one doesn't work.
[00:09:45] So our tip number three, whether you're a buyer or seller in multiple offer media is understand the timelines for awarding the bid because we don't want to drag it out too long. The seller risk losing a lot of good buyers. And the buyer risks just getting burned out and not wanting to, to play the game, which is kind of the same thing.
[00:10:09] And as a buyer in that situation, you can try to be firm with that, that seller, that seller's agent, and just say, you know, we'll write a really good offer. You'll love our offer, but we're not gonna, you know, we're not gonna wait 10 days.
[00:10:23] You know, the only time, it's appropriate to have that long of a waiting period, is if it's a foreclosure. A lot of those foreclosing banks have by law by state law or by some banking commission, there's somebody deciding they have to give a certain amount of time on the market.
[00:10:41] And also estates, divorces, probates, conservatorships. Things like that we'll have a, judge ordered or attorney recommended or something where it has to be a certain amount of days so that they don't get sued later which is, you know, nobody wants that.
[00:10:59] So, if you see a listing and it says the bids are going to be opened, a week or two later, and it just seems really long find out if it's a special circumstance. Because if it's not, then they're just overplaying their hand at least in my opinion.
[00:11:16] So, and in our market right now, it's starting to change. This is the transition time. We're starting to, to hear on the national news that there's a flood of listings coming, and this is what I've been talking about for too long.
[00:11:31] I think I called it too early, but they're coming. I swear, they're coming. And now it's making the national news, but at the same time and some of our local price points, we're still, you know, really arm wrestling, over, over properties. And it's, it's really kind of brutal, but that's what a transition market is like.
[00:11:50] You've got a little of both. So, if you're out there dealing with, multi offer mania, try these three tips. Be aware of the actual neighborhood price because of the appraisal. That's number one.
[00:12:03] Number two is, find out what terms you're willing to accept besides money as a buyer. What terms are you willing to offer besides money?
[00:12:12] And number three is, don't, don't play around with the timelines for opening the bids and don't change it. When you make, when you tell somebody that's, when it's going to happen, don't change it. And as a buyer, if somebody is starting to play that game, you, you that's, that's setting the tone for the whole transaction.
[00:12:31] You might want to rethink the whole thing, unless it's the home of your dreams. One of a kind can't be replaced, then you just suck it up. You know, buyers, you just suck it up and, and do what you have to do to get that one property. But, I always like to have plans B, C and D and as buyers, I think you're going to do well if you have plans B, C and D as well.
[00:12:55] And as sellers, if you don't get multiple offers, then that's another signal the market's changing. Or there was something about the property that the buyers didn't like, or the price was just too high. Okay. So those are our three tips for today.
[00:13:10] I'm Alice Lema. Give me a like, give me a comment. These are educational videos. We want to know if it's helping. We want to know, if you like it. If you have any questions, use, make a, make a note in the comment line. We got a call this week, from the, rural property podcast we did last week, where we recommended that you find at least the four corners of the property with a surveyor. So that everybody understands because fences are not always the, the property line.
[00:13:39] Remember that. So we got a call and somebody said, oh my gosh, I have to do that because I'm going to sell next year. And I already know my neighbor's shed is on my land and we need to get this straightened out. Cause I don't think my neighbor knows. So, so I'm glad that that was helpful. Thank you for that call.
[00:13:56] And you know, it was John, John in Central Point. Yeah. So give us a like, give us a comment, share it with your friends. That's what this is for. If you need any assistance over the weekend, I'm here. I'm around text me, call me (541) 301-7980. There's a lot going on in the market, but that also creates opportunity.
[00:14:17] Okay, so don't be shy. Give me a jingle, have a beautiful Southern Oregon weekend. We'll talk to you next week. Bye now.