My Buyer only wants one house. Why make 14 offers?

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My Buyer only wants one house. Why make 14 offers?

Yes...it's BB!!! Making offers on Multiple properties. Do your Buyers do it? Mine do. And here’s why.

In the Central Florida market right now REOs (bank owned properties) make up a HUGE percentage of the saleable inventory of homes. Most sell very quickly, for higher than listing price and with multiple offers.

This can be very frustrating for Buyers and their agents. It seems like every time you make an offer on a REO property it is either pending or a bidding war is going on. So what do you do?

What I do is have my Buyers make offers on numerous properties at the same time. We don’t even look at them. If a good property comes on the market I send an offer for my Buyer to sign and then we forward it right on to the REO agent. We want to get into the game.

Last week I presented 14 offers for one Buyer alone!!! My Buyer’s intent of course was to only purchase one property. Luckily we received acceptances on 2 of the 14. My Buyer was so excited he changed his mind and decided to buy both!! You just have to love it when that happens.

It happened to me this week too. So….submitting multiple offers turns out to be a very good thing. The Buyers are not only getting the property they want but they also getting a second one as a bonus!!

Now listing agents are probably not thrilled about this as we end up withdrawing a lot of offers. I had a conversation with one of the REO agents last week who asked me if the Buyer had seen the property. My answer was “no”. He seemed to be a little perturbed and actually said I couldn’t do that. Said I was “playing dirty”.

Now folks…..I don’t think I have ever seen a law that stated a Buyer needed to see a property in order to make an offer on it. Have you?

We look at the property between the time the offer is verbally accepted and the time the bank sends us over the final addendums. As you know, if you sell a lot of REOs, this could be a day or 2 weeks. Whatever it is it’s plenty of time to pop over and check out the property.

I’ve been primarily a Listing Broker my entire career. I think I’m getting pretty good at this Buyer stuff though. Am I playing dirty or am I just doing the best I can for my Buyers? What say you?

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Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 06/24/2009 05:59 PM

Comments (188)

Buying Foreclosures in the Home Buying Channel

opinion, reo, foreclosures, multiple offers

Originally posted at: Selling Poinciana One Property at a Time.: My Buyer only wants one house. Why make 14 offers?

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188 Comments on My Buyer only wants one house. Why make 14 offers?

JUN

2009

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Hun...

I don't think you're playing dirty. You're simply refusing to allow REO Agents and Lenders to dictate how you run our business :)

TLW...ROAR!

Bryant,

I've often done this with out of town clients, but we numbered them and I presented them in order!

The biggest difference between then and now was I presented the offers and the buyer wasn't allowed to collect offers. If I left with out acceptance, I went straight to the next seller, if the first seller called back latter I was sorry but they can wait another six months to get another offer, I wouldn't be showing their property.

Today I like your apporach if the seller or his agent won't play fair and collects offers why shouldn't the buyer?

Congratulations on the sales, you earned them!

Bill

What a great post! And what crazy games we have to get into nowadays to keep things going. I mostly work with buyers and if listing agents think you are playing dirty, what would they say to some of my buyers that patiently wait around 5-6 months on a shortsale only to find out the bank counters an unreasonably high amount and has no feelings for anyone involved, even willing to foreclosue after hundreds of man hours have been put into the transaction. That is what I call dirty!

Oh, and good luck on selling both properties to your buyer. I take it he must be an investor !?!?

I've got no issues with buyers making multiple offers as long as it is disclosed. We all know that because of the process of REO sales a buyer is safe from having more than one offer accepted as every bank is going to require addenda before they sign anything, but it IS frustrating when we're processing multiple offers and the winning bid withdraws because another offer they submitted was accepted before ours.

Understandable a buyer wants to get in as many games as they can (investors, especially), but by not disclosing and particularly not notifing the agents involved that the buyer has already opened on another property and no longer wishes to proceed with our deal has pissed me off more than once.

Bryant, This is interesting and I am enjoying reading the responses. I have only experienced one offer per property, never multiples.

James, Dislcose what and to who? I know it's frustrating but my buyer certainly doesn't have to disclose to the listing agent that we are submitting offers on multiple properties. Now I do agree that we need to withdraw offers as soon as we get an accepted deal. And we do. But with the exception of a few very good REO agents most in my area don't even return emails or phone calls. I wouldn't have to make multiple offers if they would at least do that so we know whether or not we are wasting our time. My buyers make offers over list price and they are all cash.

What I have basically done is flipped the frustration onto the sellers and their agents and got it off me and my buyers. We don't have to play by the Lender's rules. I always prefer playing nice. But unfortunately the REO agents and lenders feel they hold all of the cards. I had to devise a way that works for my buyers.

Thanks for your input James.

Niki, I personally only work with Investors. And only ones that have cash.

Thanks Bill. Some things never change.

Hi Hun. I promise to play nice.....maybe.

BB...

I LOVE it. Turnabout is fair play. And I would NEVER disclose it, there is no obligation to do so. The listing agents have been playing this game for a long time, and your response is a fair response to the market.

I just wish that you would not have let the cat out of the bag ... now EVERYONE will be doing it!

Richard, Turnabout is fun too!! You'd think everyone would do it but they won't. They'll be too concerned about how the listing agent feels. Heck I am a listing agent!!!! It wouldn't bother me at all.

BB,

Being like you...primarily a listing agent..I can actually tell when an investor is putting in the offer with me and most likely with other homes at the same time...the MO usually is that they only put down $1000 upon acceptance and they never call me...they just send it and if they don't get a response then they just disappear. We did the same thing when we acquired them also. You have to expect this to happen especially if they bring really low ball offers...hoping one gets accepted.

BB, I didn't say it was required to disclose what you're doing, but out of courtesy you should be disclosing to the listing agent. Glad you're withdrawing offers as you go along ... That's a big step up from most who use this strategy. Problem is, once I have this pulled on me, the agent that wasted my time gets noted in my memory so I'm sure I don't wase my time again.

I disagree about the displaced frustration because if I was a buyer I'd hate to keep writing offer after offer and if I was the agent I'd hate it too ... Of course, if your buyers don't care what they buy as long as they buy something, then I guess I can see your point.

Remember, if you were using this strategy on "regular" sales the buyer runs the risk of having multiple offers accepted unless they put in a clause requiring that the buyers have the right to back out after seller's signature on the original offer. The only thing protecting the buyer is the fact that no REO seller signs an offer without buyer's sigs on all their addenda first. I'm sure you know all this already, so I'm preaching to the choir :)

BB - I'm not sure if I agree. In your case, 2 were accepted and they could afford 2 homes. Most clients that I serve cannot qualify to do that and only have 1 intention to purchase 1 property. Many times, my buyers can the mentality of casting out a few nets hoping to get 1 good one. I'm not sure I like that mentality.

I educated them that these offers that they make, once accepted is a legal binding contract and we have to respect and honor that. Most buyers cannot perform on 2 properties.

Every mkt is obviously different. Here, I've NEVER submitted multiple offers, not once. I consider that playing games. I also don't work with very many investors, short sale buyers either. Maybe that's the reason why. I am very selective who gets in the car if that makes any sense.

BB, my question is...If multiple offers are accepted, I'm guessing earnest money is being offered for each of these properties...So wouldn't one be required to pay up the earnest money if they withdraw their offer but the seller demands the earnest money? I've never run into this before, but I'm curious as to how that would work out...

Chanda panda

James, I am very conscious to make sure I am not wasting the LAs time. We only submit good offers and we do withdraw prior to being accepted. Our intentions are good. And we are only doing this with low priced REOs. And again iof there were a way to communicate with the REO agents I wouldn't need to do this.

Your point about courtesy is a two way street. Lenders always sign last for a reason. If they verbally accept my Buyer's offer and then get a higher one in they will not hesitate to accept it and throw my buyer away. In fact, some of the bank addenda even give them the right to do this AFTER the deal has been signed. The seller can back out of the deal just because they feel like it.

I think it's important to point out that my buyers are serious buyers. We are not going around low balling properties hoping to get a deal. They just want to buy a rental property. In my market it is very common for the REOs to be priced well below market value with intent of creating a bidding war. Properties priced at $39,000 will sell for in the $70s. I didn't create 'the game" I just learned how to win it.

Neal, It's even more noticeable when my buyer makes offers on several REOs that are listed with the same agent!! The agents are so busy they don't even notice. Or if they do notice they don't mention it.

Loreena, This technique would not work with yoiur average Buyer. I only work with experienced Investors that have cash. Most are out of the country and aren't here to look at properties anyway.

Chanda, Accepted offers don't become contracts until all parties have signed and the contract has been delivered. When dealing with REOs this always takes several days minimum. We would not just break a binding contract. We could however use the inspection clause in the "As Is' contract to get out if needed. Also, I'm usually working with multiple Investors at the same time so if we do end up with multiple acceptances is quite possible that one of my other Investors will take over the deal before it is signed.

Greg, In my market over 90% of the sales are REOs or Short sales. We do what we have to do to survive. As long as it's legal and ethical. And in this case it's both.

I've made multiple offers for a number of buyers over the years.

I would never disclose this fact to the seller, that's confidential for the buyer.

When I write an offer, I always have the buyer sign a NOTICE OF WITHDRAWAL to keep in my file for every offer we write. If we get a ratified contract, I send the NOTICE immediately.

Also, it's a good idea to know your buyers, as much as you can about the sellers and write your contracts so that there is a way to withdraw/or otherwise kill the offer or the contract should you wind up with more than one. There are many ways to do that.

If there is something wrong or illegal with this, I would like a citation.

I'm always willing to learn.

I just sat in 7.5 hours of continuing education learning today and I'm hungry.

Bryant - Makes sense to me, but then I'm just a Mortgage Guy. This should prove to be an interesting discussion which seems to be the beauty of many of your contributions. I'm actually dealing with a couple of agents who do this exact same thing and from my end, I'm throwing several pre-approval letters at them for each specific property. I'm no legal beagle when it comes to Real Estate, so I'll sit back and read the conversation.

I agree, courtesy is a 2-way street. I also am well aware of the issues that buyer agents have with REO agents. I'm not apologizing for or excusing the poor service of some of the REO agents out there. I do understand your/your buyer's frustration with the REO game ... most of my REO clients reserve the right to cancel for any reason up until the day of closing.

As I said, by withdrawing your offer, you're a step above most of the agents who do what you're doing. I'm not accusing you of doing anything wrong ... I would probably be doing the same if I was in your situation. I just wanted to go on record here from the listing agent's side since so many people read your blog and may want to give this technique a shot.

Consider mine the voice of the listing agent who has to deal with all crap on the other side of the fence! Buyer's agents complain all the time about poor response times and how unfair banks are. You're (and I'm using the generic "you" here) dealing with 14 offers and one client who needs/wants instant information ... We're dealing with one property and 14 agents wanting instant information. After the 35th call asking if we have an update on your offer after we've told you that we will contact you as soon as we have any new info it gets real easy to let the phone calls go to VM.

BB - Logistics aside (per local conditions) this is about the best take I've read on this pathetic market. Add to that Lenn's advice to have a withdrawal clause...and just maybe the tides can turn if the banks start to understand that WE (realtors/agents) are the ones with access to the buyers. STOP JERKING US AROUND you arrogant SOB banks and just maybe we can start turning YOUR mess around....not that I'm pointing fingers as there is plenty of blame to go around. I'm just saying.....my 10 cents worth!!!

Having said that...the loan mitigators will be the next AH's to come under scrutiny. Heaven help us through these times 'cause the politicians are CLUELESS!!!

To James the Listing Agent: Then put into the MLS a price that will be acceptable to place the home under contract. I "used" to be a listing agent....but cannot abide these games being played on many levels. If NAR on down demanded that a full price offer be accepted per MLS then the games would stop. I no longer take listings and will NEVER list a short sale. I'll stop eating before I become a pawn in a foregone game. Now I'm up to 20 cents....something to look forward to....80 more cents....LOL...and I used to be so quite, just posting my market reports and lovely photos. Just goes to show, there is a pulse beating in Realtor-land!!!

It's a strategy. The good thing about this business is as long as we operate inside the law and a framework of ethics we're generally OK. Having said that however I believe writing multiple offers with the intent to withdraw them upon the acceptance of a random one is NOT negotiating in good faith and the submission of an offer is the first step in the negotiating process. Does the fact that it's a bank owned property alter our moral compass? I hope not.

Generally speaking, I do not fault anyone else for doing this? Would I do it myself or recommend my agents do it? Maybe in rare situations, but not as a standard of practice.

Gene

Hello BB, wow, now there is a situation. I don't represent investors, so I can't comment on that. I wouldn't do that with the clients I have.

Interesting read though. I have to admire you for taking lemons and making some really awesome lemonade out of it!

Bryant - First of all, that adorable child in the photo is you...isn't it? As for the multiple offer game? I'm sure you could call the legal hotline at FAR, ask 2 attorneys if it's illegal and you'd get 2 ENTIRELY different answers. It's all about survival of the fittest right now and doing what you have to do (within our legal boundaries) to put bacon on the table....or in your case, wide mouth bass.

Bryant- With investors who understand what they are doing, there is nothing wrong, unethical or illegal about what you are doing.

Since I don't work with buyers and I don't work with REO listings either, I really don't care.

Now come to my short sale listings, I put the buyers feet to the fire. If you want to make an offer on our shorts, then you put your money in escrow, you perform and we make the contract effective upon signing. We know with each lender their time frame and have the science part of this down, the art part is second nature to us.

Gail- Send all your short sales to us:_

We love short sales, it is the best thing that ever happened to the residential market here:) Love it, love it, thank God for 18 offers under contract right this very moment all on different listings. We are so blessed!

I haven't done this-but I guess turn about is fair play.

If there weren't those final addendums coming back a buyer would have to be serious on 14 offers. If all accepted he would have to buy 14 homes and these games would stop.

Broker Bryant,

Another excellent blog. I often yours to be some of the most useful and informative. Thank You.

And now the subject under discussion:

I don't see how anyone could find anything wrong with what you're doing, representing your clients best interest. Disclosing multiple offers to the listing agent is definitely not an option (as it would compromise your clients position in negotiations), and the bank addenda create a counter-offer that your client must either accept or refuse (it is not your or your clients' fault that the bank does not accept your buyers' terms and insists on your buyer accepting their counter-offer).

I also do not see the lender doing anything different from what you are doing, if they were in your position.

James, I LOVE these discussions, It's how we all learn and become better at what we do. I do appreciate you participating. It keeps me on my toes!!!

Lenn, I knew you'd "get it". We are here to look after our Buyers. My market is to the extreme. So I have to take extreme measures.

Gene, My buyers are negotiating in good ,measure. The properties they offer on are properties they want to buy. The seller that responds the quickest will more than likely get their business. If they sit on or ignore the offer they will not. My Buyers are not at the Lenders mercy no matter how much they want us to be. Our intent is to purchase NOT withdraw. By law either party can withdraw an offer prior to acceptance. We are not doing anything new. Just different.

Gail, tell us how you really feel!! it is frustrating out there but I would fight with tooth and nail if NAR or our MLSs required a seller to accept a full price offer (of course this would never happen). By the way, I AM a listing Broker. 90% of my business is listing Short Sales. I fully understand what REO listing agents are going through. I've chosen to come up with a "work around" that works for my Buyers.

Hi Andrea. I've been selling real estate for a long time. Figuring out markets and how to make them work for me and my customer/clients is what I do.

Laraine, That picture is me!!! Fat little flucker! Our legal hotline gets it right every now and then. I actually argue with them quite a bit.

Bryant...and whatever happened to "specific performance" List a property, get a willing and able buyer, cash offer, no contingencies. I'll tell you what...."specific performance" can be enforced in a normal sale. Why should banks be treated differently???

30 cents - ka-ching

Gail, Agents that deal in Short Sales are a much needed necessity in this market. I too LOVE short sales. Not because I enjoy making money off other people's pain but because many people are struggling and I can help them. I can take part of their burden on my back and help them avoid a foreclosure. I would much prefer a normal market but right now, in Florida, that's not an option. So we do the best we can with what we are dealt. Handling Short Sales is the most fulfilling thing I have done in a long time. I pray to God every day to give me the knowledge and wisdom needed to help as many folks as I can. And to help them with compassion and understanding.

Gail, Specific performance can only be enforced AFTER an offer has been accepted, signed and delivered. Specific performance relates to a CONTRACT not an offer. Now having said that a listing Broker MAY be able to sue for a commission based on his listing CONTRACT. A seller can NEVER be forced to accept an offer. Make sense?

Believe me Bryant....I GET everything you say and I believe you are doing the best you can for your customers. BUT, the banks (and that's my issue) are again, let loose with no accountability. I cannot, for the logic defies me, play the game as it's played right now. If WE as agents do not attempt to hold them to the same ethics and laws we must abide, HOW are we to persevere when the next wave hits. Your customers will not WIN, we will not WIN, America will not WIN. This is bigger than many wish to acknowledge.

40 cents

....in a short sale the contract has been signed by the seller....constitutes acceptance (oh yeah the bank has to accept as well) See a problem here??? Oh...and I'm NOT talking about commissions!

50 cents

Bryant... I am envious of the multiple offer syndrome, I have short sales listed at half their purchase price, and no worries of dealing with multiple offers. One, anyone would be nice!

I am in the middle of that as well. I am going to submit two offers tomorrow.

BB (& friends?),

Never have been in this position but I'd love to have it crop up. Thanks to this post, I'll be in a position to offer more suggestions to those buyers.

I list as many shorts as I can. Bloodsucker? Nope. First, we work much harder with shorts. Second, testimonials from those distressed sellers prove I treated them fairly and respectfully when few others cared about their plight. No doubt you and Katerina have a stack of the same.

Sounds like a great deal for you. Something that I have seen a little bit recently--not sure if you can do it in Florida-- is an addendum with purchase contract that says, "Buyer to pay 1000.00 higher than highest offer not to exceed XXXX.XX". Also included is a clause about the listing agent providing proof of the highest offer. Not sure if this works, but I did see it last month on one of our listings!

Fair, schmair . . . listing agents take mulitple offers all the time, and they can only sell the ONE property to ONE buyer . . . all's fair in love and war -- AND the purchase of real estate.

In the tight sellers' market a few years ago, I started advising my clients to put in mulitple offers on several properties they wanted. If they didn't want to get into a bidding war, not all properties were doing that. Some of the offers we made were only accepted as back up offers anyway, so there was never any entanglements. I would also encourage a "buyers reserve the right" blurb, just as a CYA.

Thanks for the post -- reminder . . . or good advice.

Hey BB great conversation.....

This practice was a legal hotcake back in 2005 here in AZ. If they buyer can't afford to purchase more than one property then he/she should disclose that. What seller would accept an offer knowing it quite possibly would be cancelled during inspection period? These were just a couple of the questions persented by AAR.

We had sereral situations back in 2005 where they buyer ended up with 4+ accepted bids - but only could afford 1. Obvioulsy his intention was to back out during the inspection period on the others. Where does that leave the seller? The seller accepted an offer thinking the buyer was ready , wiling and able only to find out he was not. The legal folks came out like big dogs and put a kabash on this practice and called it fraudulent.

I totally understand the craziness with the reo agent and listings......we're chest deep in them here as well. We do write up several offerrs now but present one at a time - unless they have plenty of cash or credit to afford more. I know it's dog eat dog out here.....and I too have had my frustrations with reo agents that are way over their heads with more listings han they have help to keep up with. The behavior is the worst I've ever seen. I know this the same things are going on here.....and the legal beagles are all over it again. I just might give legal hotline one more call regarding this tomorrow and report back in.

Let's hope this mess ends sooner rather than later and we can get back to more normal business.

Jump on the REO's when they are ripe. Most spoil under the lamp. Good for you. Do it all the time. Most REO agents don't care. Neither do I

Wow all I have to say is that is a hell of a lot of work. I don't think I can ever remember writing more than one offer at the same time. Amazing how different Real Estate markets can be.

Great blog,

I've been writing multiple offers for my buyers for the last 2 years. It increases my buyers chances of getting a home. If you write one offer at a time and have to wait a week or two only to get denied, it could take months to finally get acceted. Most buyers want a home NOW and they can't handle the frustration of being denied time after time.

As a buyers agent, it is my job to find these buyers a home. If writing ten offers at the same time for the same buyers increases their chances of success, then I am doing my job and looking after my buyers best interest!

I agree with Anna on this. If the buyers do not have the financial capacity to actually buy and close on all 14 homes in my opinion it is on very shaky and dubious legal ground to submit 14 offers. I would strongly suggest running this by (a) an attorney and (b) the state real estate commission and get their thoughts on this.

Sounds like your market is similar to ours here in Vegas and only an idiot someone who doesn't want their buyer to buy a house would submit one offer and wait 2-3 weeks for an answer from an REO agent with 20 offers on the property.

For a while here, if I called and found out a property had a few offers already, I would discuss it with the buyer and usually not bother going to look at the property or submit an offer. Now, as other agents have caught on and are making so many offers, it makes sense to put an offer in there even if the listing agent has said "the bank has accepted an offer and we're waiting on the paperwork" because chances are that the buyer will not follow through. I remember submitting an offer to an agent who wouldn't give me the time of day because she had over 20 offers on the home. 3 weeks later she called back (a tiny bit more humble) and asked if my buyers were still interested as she currently had no current offers.

I agree with your method, but in moderation. Go overboard with the multiple offers and withdrawn offers and you may create a negative reputation among the REO agents who may create a special file for your offers.

We used to operate with buyers that way on non-REO listings when the market was hot. Properties would hit the market on Friday and 8 offers would be heard on Tuesday. Some listing agents would ask if your client had made offers on any other properties. Of course you have to disclose this information if they ask. Not all of them asked! Good luck with that.

I had a buyer wanting to write offers on 3 short sales. They wrote offers on 2, knocking out the highest and best on both. Today, they withdrew both offers stating they were going to have a house built. Now I have to start the process all over with the banks and I've lost the first buyers. I'm getting frustrated with these buyers making multiple offers. I need to be the buyer's agent for a while instead of a listing agent.

YOU BET!!! Here in Northern California (Sacramento Region) where we've been hit like you in Florida with both REOs and Short Sales. Offering on Multiple properties is just about the only way to go. Can't sit around looking for that perfect house for most of my clients who are in the under $200k area and are competing against each other (first time home buyers and investors).

Jeff

Hey, why not?

They take more than one lender all of the way to 'clear to close' sometimes....

seriously

Hi Bryant, I agree with you totally! It is almost impossible to get a call or e-mail out of one of our big reo persons. We buyers agents are in the dark, and that is the way the reo seller wants it. It is very unfair, so I feel you have leveled the playing field! smart move! great blog.

Great Post Bryant,

I too hope you are talking of an investor. Although I have written many offers for 1 client it is usually on short sales, unless like Bill, they are out of towners in town to make a quick purchase. That is a great feeling take out 1 day show 7 houses write 2 offers and get both. Now a decision is to be made. BUY ONE. I just had that experience. Now short sales I will write 4-5 at a time. I state that "my buyer is offering on more than one property with the intent on purchasing one".

Also, I have to say that I don't agree with Nestor and Katerina. When I write offers on short sales I never put money in escrow till we have acceptance from the lender(s). I also do not submit a deposit. I state "buyer to deposit earnest money within three days of lenders acceptance". I have never had a problem once I educate the listing agent that there is no escrow to write a check to and no acceptance AND why tie up the money when we don't know that our offer is going to be accepted.

Bryant, I don't believe there is a law that you have to see the home to submit an offer. That is what contingency time frames are all about.

The bulk of this commentary is directed to short sales, foreclosures and REO property. I recently had an agent submit four offers, none were the above type of listings, and she said her Buyers loved her for it! She did disclose it to me as part of her "negotiating" techique that they had the four offers out.

Said she does it all the time in California. Well, this ain't Kansas Totto.

What is your opinion of that.

In GA we actually have something in our contracts specifically for this. A checkbox in which the buyer must disclose whether this is their only offer or if they have others in the hopper simultaneously. In my opinion, that is the fairest way to handle this situation because then the owners (lenders) will know that they are one of several offers and have the right to give preference to those who are only trying for their property and less likely to back out.

I list REO's and 90% of the time we have multiple offers. I always check with the agent to see how much their buyers want the house and if they even seen it. Now my friend you may ask why I would do that? Early on I learned my lesson the hard way: I once sold a home 5 times because of all the flaky buyers that came through and wrote offers on it. That is a lot of work on my side with all the negotiation and mutuals and back on the market and back to square one.

GREAT BLOG BB!

Since you are in my backyard, I feel the pain. I am a listing agent, do many short sales, deal with loss mitigators who have no clue, and agents who have no clue.

I subscribed to the fannie mae site where you can find out what REO's are coming up but not on the MLS yet...found a great one for my buyer, and emailed and called her repeatedly for several days.

Got an email from her today saying "oh, so sorry, but it is in the MLS now and is pending" good luck with your buyer though and sorry I couldn't help you earlier. Guess what? She probably held it off the market til she could get her own contract so I don't feel sorry for making multiple offers. The short sales are different from REO's.... I have finally figured out, just like you, how to play the game and if the agents don't like it, then sorry, because if you don't call me back so I can sell your house and you hold it off the mkt til you can double dip then is THAT PLAYING FAIR?

NO!

In Florida we have to do what we have to do to make a living. If agents all played fair and lenders did the same, we wouldn't have this problem, but if you make an offer on 14 short sales, and the bank says I'll accept your offer, but still wait for a better deal, and after you pay inspection fees, appraisal, termite, survey, loan app and I kick you out at the last minute, due to a better offer, then I say turnabout is fair play.

I emailed the agent back that I tried to get in touch with a week ago, before the REO was in the MLS and said not to worry that I'd ever make an offer on one of her properties again, and not only THAT, but I called the lender to let them know that she did not try to get the highest and best deal for them. Only when the closing happens will I know what the price closed at, but I can almost assure you my offer was higher. The bank wasn't very happy to hear my complaint and this agent might now be stricken off their REO list, and it serves her right.

Good job BB! What goes around, comes around!

Ugh. I hate those. When I see those offers for my seller I explain what they are getting into. Usually they counter to have the 'lose' language removed or we keep it on the market for a better offer. I know it is crazy out there and see the other side too. I saw some listings in our mls that state "Buyer must view property prior to submitting an offer" even "buyer must complete inspections prior to submitting an offer" guess that makes it pretty solid.

REO is a different animal as far as contract acceptance because you always wait for the lender but if you are dealing with a short sale and the seller signs the offer within the acceptance window, it is a contract subject to lender acceptance and the buyer is obligated to perform and deposit the earnest money in an escrow account. This can add up for a buyer presenting multiple offers and if the listing agents wants to play hardball they can tie up the buyers down money for the time specified for lender acceptance on the short sale addendum( at least in FL) knowing full well he may have a contract escape based on financing and/ or inspection.

So make sure your buyers understand what is at stake in the multiple offer game!

I've been doing the same for my buyers. I disclose this fact, but even if you do somehow accidently end up with two acceptances for a buyer who can only buy one property you have your 10 day inspection period to cancel for ANY reason. Nothing lost.

Bryant, I think that's fantastic! I, myself have recently been frustrated by the strong arm of the banks. Do you think that it's suitable to refrain from withdrawing multiple offers until we've made it through the due diligence period on an accepted offer?

Great post!

Jana Bryant

James,

You keep referring to the "lenders" and saying "well they do this, and they do that". Quess what buddy - you're not a lender, you're a real estate agent. Just because the lender has no ethics doesn't mean it's "pay back" time and you should follow in their footsteps. We, as agents, already get enough bad "raps" from consumers - we don't anymore. I also feel that doing what you did depends on your market and the situation. However, would I ever do it - I doubt it. My biggest concern would be that both Sellers accepted and my buyer would be stuck with two homes (one more than he probably could afford!) instead of the one he wanted to buy.

Susan

RE/MAX

Bryant, people who are not in our market may not understand why you are doing this but I agree with your practice. You are giving your buyers a chance at the properties. If you do it one at a time, it may take months before you get a 'yes' on one. It's just not practical in your market and you would be doing a disservice to your buyer. As others have said, banks can drop a buyer like a hot potato if they get a better offer. Turn about's fair play!

Sharon

Playing dirty??? I don't think so!

Playing dirty is:

-the VA appraiser taking over 2 weeks to do an appraisal causing us to miss our closing date (and a Realtor bonus$). Finding out this appraiser has 18 complaints filed yet the VA says they HAVE to use him.

-having the bank cancel when my client needed an extended COE to obtain a military document, (after he paid for a home inspection) and then re listing the property at a lower price. Then after resubmitting the same offer the bank accepted his offer over two others, then canceled AGAIN the next day!

-the bank threatening my clients with $100/day COE extension when the underwriter decided three days before our COE date that a second FHA appraisal needs to be ordered.

My clients have all acted in a timely manner to do whatever is requested of them, and it frustrates me to no end when the banks threaten to cancel, threaten to withhold earnest money, threaten per diam penalties... Luckily, I have been able to fight to keep them from enforcing these threats.

I also put in multiple offers for my clients. I usually do up to 5 and one usually comes through.

Playing dirty? I don't think so. You are just doing your job!...and it sounds like you are doing a good one.

Playing dirty??? I don't think so!

Playing dirty is:

-the bank threatening my clients with $100/day COE extension when the underwriter decided three days before our COE date that a second FHA appraisal needs to be ordered.

I also put in multiple offers for my clients. I usually do up to 5 and one usually comes through.

Playing dirty? I don't think so. You are just doing your job!...and it sounds like you are doing a good one.

PS Short sales are a form of community service that we get paid for in my mind. Saving a family from the dreadful effects of foreclosure and keeping a property from going down further in value and being empty is a valuable service to the community, the seller, and the buyer.

Sharon

Bryant,

Our market is different and the section of the city I work in I would not be dealing with this occurrence. Soundslike for your area you are in the center of a crazy market and enjoying it!! Congratulations and hope you make many sales!

Well, this certainly has been a lively discussion! I have an out of town customer to buy in an area where about 80% short sale, 10% bank owned, and 10% resale. She will be leaving having written an offer with Plan A, Plan B, Plan C. I may end up using some of this technique on the bank owned.

I am gobbling up this entire post and flip-flopping depending on the comment and your response. Very thought provoking and since I hail from Toledo Ohio, which will be having 600 additional bank owned properties on the market any second now, I hope I can use your experience to help some of my buyers with these properties. It is all so freaking frustrating. I wanted to use another "f" word, but you know how that goes.

Thanks for a great post, whether or not everyone agrees.

Bryant: I love the honesty in your post.

I have experienced submitting multiple-offers for clients recently. Not by design but by default and by necessity. When my clients' offers are backup offer, or even primariy offer on a short sale, there is nothing to say

the seller's lenders are NOT going to approve after waiting for months
the buyers lenders are not going to change the interest rate, the qualifying criteria, for my buyers
the primary offer will be approved and my client's back up offer will not go forward after waiting for months and months, .. etc

just to name a few. When the sellers signatures are not a real acceptance, who is to say who is right?

As a listing agent for short sales, my clients have been burned a few times for buyers dropping out due to the wait, mostly or when they see properties that meet their needs better. So I undertand both sides.

But NO, I do want my clients to go and see the houses and make sure they really want the house before they make an offer. There is no sense in making an offer if your clients don't even like the house. That's one thing I disagree. The other thing is the listing agent can say they have 5 offers instead of 4 and drive up the price. No need for that either.

Wow!! Great responses. I do want to point out that I am only doing this with experienced Investors with cash AND only on REO properties.

OK it's past my bedtime so Ill come back in the morning.

BB You wrote:

Gene, My buyers are negotiating in good ,measure... ...Our intent is to purchase NOT withdraw...

Final question.

Your buyers "intent" is to purchase all 14 properties? Great! If not, your buyers "intent" is to "withdraw" on the ones they do not "intend" to purchase.

But like I said earlier, go for it.

Gene

I personally like your idea and applaud your moxie. Before I would ever dare to try it myself I would make sure it would be okay with my broker's legal staff and my office manager.

I don't know how Florida law works, but another way to legally rescind an offer on a REO within 30 days in Ohio:

In Ohio the seller must provide a 4 page property disclosure, and out of state banks or sellers are not exempt if the property was a foreclosure. Always ask the listing agent for one, they will seldom have it or provide one. They always claim the bank is an out of state bank, and will only provide the Lead Based Paint disclosure. If the seller will not comply to the state real estate laws in which the property is being sold (in this case by providing a Property Disclosure) the buyer has an automatic 30 days to rescind their offer based on not having been given the property disclosure. Out of state banks are selling properties while refusing to follow real estate law in the state where the properties are situated.

Wow...what a conversation....And I surely think this is a great tactic to get the client their purchase they want. In added response to Marybeth...don't feel too bad....we're on week 3.5 for the VA appraisal!

I think the important thing to do is to adapt to market conditions. In your market, I agree that it makes sense to do what is necessary to get in the game. With those numbers, a buyer can just drown working with one buyer having deal after deal get rejected after doing all those showings. I like it ! Of course it depends on your relationship with your client too.

I am all for multiple buyer's offers, when warranted, but my main item of concern involves the logistics.

For example, what if an offer is accepted by one seller and emailed to the seller's agent, who is not able to receive the email (out with other clients, asleep, etc. etc.) until a few hours later and in the meantime, another acceptance comes in, prior to withdrawing the second offer? A realtor must be extremely diligent about standing by at all times on email/phone AND ready to send in a withdrawal, and any delay in getting to read email or fax could mean two accepted contracts.

While confidentiality may be the best way to handle multiple offers in certain situations, a realtor may also use the "invitation to offer - invitation to treat" approach, which requires additional action after a seller's "acceptance" to ratify an offer. In this situation, you inform the seller that you are working with mulitple sellers/properties - which adds some additional pressure to act quickly and with their lowest acceptable price. Not always desirable for the buyer, but may work quite well at times with a motivated seller and a property that has been sitting a long time.

Seller can "accept" by agreeing to your terms, which is really making an offer, and then the buyer must ratify to make an accepted contract - or they can "counter" which is actually, also an offer from the seller. Then the buyer may review all "offers" and decide which, if any to ratify.

Here in PA we have what is called "PRICE ESCALATION TO AGREEMENT OF SALE".

This form was only added to PA this year. I knew of it previously since my sister is also licensed in VA.

We just used this very successfully last week in a bidding war on an investment property where the bank was the seller. For our investors this is a great tool for them. They decide the highest they will pay for the property and in what dollar increment to go beyond the highest offer. They snagged a super duplex for $100 more than the bidder below them.

The agent for the bank was great. She presented all the offers and then sent us a list of the other bidders, all the names of the buyers blotted out.

Great post.

hmmhhh... interesting..

This one if fun!

I am also a Realtor in Las Vegas and I can tell you the way the market is moving here, if you don't submit multiple offers you might as well hang up your license. On an average, we are selling over 400 properties a day, of which probably 85% are Bank Owned. Anything under $150K is usually gone in hours with multiple offers. Of course you have to use a little commom sense....would I submit multiple offers on a "normal" sale, NO, because you could be placing your Buyers in a tough spot. I expalin to my Buyers what the plan is and yes they get tired of signing mutiple's as much as I get tired of writing.

The banks are not innocent in this process either. At least here, it is obviuos they are listing very low trying to generate multiple - over list offers. And Short sale folks are the worst for the under pricing.

I swear I don't know how it can be legal to list a property less that what is owed, without all of the principlas involved, yea the bank also. In Nevada, the law now has been interpreted to say, "Once an offer is signed by the seller and submitted to the bank, any additional offers submitted is considered "Contract Interference" and is illegal.

But on these REO's it is the only way. By the time the Bank responds and sends you addendums that totally re-write your contract, then forces you to use a title company that has added lots of bogus charges for your Buyer to pay for the reduced rates they negotiated with the banks..............it is a joke how how these banks are getting away with!!

You have also really hit my button on the poor, over worked, REO and Short sale listing agents. What a bunch of crap! I promise you they are not working any harder than us Buyer agents having to write multiple offers because of the lousy service provided by the listing agent. We have REO agents here with 200-300 listings and more ....want status, especially on a weekend, forget it. They won't even take a phone call and if you leave a message, it will be days, if ever, before you get a response. When I complain abou tthe losuy service their response is always, "We are so busy..."

Know what, if you are too busy to provide even basic service to you bank clients, which includes working with other agents, presenting offers in a timely manner, maintaining accurate MLS data, and maintaining the property at some minimum standard........... then don't take the listing!!

This one if fun!

All real estate contracts have an implied covenant of good faith and most contracts have an expressed covenant of good faith. It seems to me that a buyer who has the financial ability to buy one property, but not 14 may be breaching the good faith provision. From an agent's point of view thare is the possibility of an ethical violation of fair and honest dealing. Furthermore, agents talk and should to word get out that one of their own is conducting business as you described, they can get very vindictive. The practice of making simultaneous offers may run contrary to the goal of bringing the parties together.

In this crazy market with banks and REOs and many times unresponsive banks your approach sounds like a reasonable one.

In NC there is a place on our offer to purchase and contract where it specifically asks - [ ] The buyer has seen the property. My market is the beach and many of our buyers are out of town. When the market was hot. It was not all that unusual for the buyer to have NOT seen the property before making the offer.

Susan Milner in Cape Coral says:

>>>Ugh. I hate those. When I see those offers for my seller I explain what they are getting into. Usually they counter to have the 'lose' language removed or we keep it on the market for a better offer. I know it is crazy out there and see the other side too. I saw some listings in our mls that state "Buyer must view property prior to submitting an offer" even "buyer must complete inspections prior to submitting an offer" guess that makes it pretty solid.

Susan, this is usually due to the fact that the listing agent wants it his or her way. Usually the lender has no clue what they are doing and it is not in their highest and best interest for the listing agent to be so demanding. This is what this whole blog is about. The LA can not force you to do inspections or view the house prior to making an offer. Just make the offer, they are obligated by FAR and NAR rules to submit any and all offers. If you ask for an update and don't get one, call their broker ;-)

In response to David's post from GMAC (not sure what state you're in) who says: >>>

Not true. The seller accepts the offer, then you have to send the offer and a HUD1 to the lender for acceptance. They will then usually take longer than the time for acceptance and if you have a 10 day inspection clause, then you can certainly make multiply offers and get around this. Lenders play these games all day long, by the time you get an acceptance for your buyer that they like, all they have to do is tell the lender they didn't respond within the time frame, or the home inspection didn't meet their likeability factor ;-) Banks have been playing these games and even after acceptance of a HUD1 they have OTHER clauses in their offers. New HUD1 prior to closing subject to lender approveal (that is there escape clause) additional fees due if no closing by closing date even if it is their fault, $100/day plus per diem) so I do not feel sorry for the banks, they are now getting what is due them and just in case anyone doesn't know, if you have a fannie mae loan, they can no longer negotiate you down on your commission, whoo-hoo!

On to the rest of the post from David:

>>This can add up for a buyer presenting multiple offers and if the listing agents wants to play hardball they can tie up the buyers down money for the time specified for lender acceptance on the short sale addendum( at least in FL) knowing full well he may have a contract escape based on financing and/ or inspection.

Not really true. I make all my contracts contingent on deposit when FINAL acceptance is approved and not any other contingencies ie: a new hud1 just before closing, etc. If they don't like this, then they can continue to pay their high priced attys, the mortgage, HOA, Prop mgmt, electric, water, etc...and wait the 8 months it now takes in FL for a foreclosure to happen. I also include a BPO as well as an absorption rate in my offers, because most agents don't know this info and the lenders NEED to know it to make an informed decision. In the meantime, the seller can just file bankruptcy and the lender is screwed. NAR COE states that you should not work outside your area of expertise, so if you are going to do these deals, you need to know how to do them.

Brian has a short sale class to teach agents how to do these, with someone who I can't remember her name right now, but I would advise everyone to take his class and learn how to do these because we are going to be stuck with this for the next several years guys.

I'm sure BB will chime in and give info on the webinar, and I'd love to be on it as well ;-) rules are different in different States, however they are not different due to Fannie Mae, Freddie Mac, or Govt loans, or the O'bama plan.... so if you have the bulk of your market in reo's or short sales, you need to really learn the game or you will be out of business in the future because in our neck of the woods, that is 95% of our inventory. If that is your issue as well, then you need to be informed and NOT work outside your area of expertise....

Chime in BB and give the info on your class!

Bryant - How about that! Your morals and ethics are being questioned! Welcome to the club! Hahaha

Anyway, what you are doing is fine. Anytime your offer gets countered on some type of terms, then your offer is no longer valid and you can pull away, which happens on all the REOs I have made offers on (usually the multiple offer disclosure asking me to suubmit highest and best). That's why I can make multiple offers on short sales and go with the first one that materializes on my terms. This, of course, cannot work on retail transactions as there might be a chance that your offer gets accepted as is.

One way to combat your issue is to determine what the property will eventually sell for and offer 10k more. In your example, I would offer 80k even though it is listed for 39k.

Gail - I pray that God gives you the ability to see that we are not "delusional or just plain greedy" and we do not "get off on making money on other's pain". These sellers are facing foreclosure. Without us, they will have their homes foreclosed on. A good short sale agent will exhaust all the seller's options first before suggesting a short sale unless a short sale is the only viable option. Just think, if we don't help them, who will and what would happen? There are times that I would have made more working at McDonald's than to do a short sale. My clients become great friends and always thank me for what I have done, even in those rare cases I failed them.

Playing Dirty? You absolutely are, but considering it's not as dirty as the banks who have no regard for the terms of a contract in the first place, it's not as much "playing dirty", as fighting fire with fire.

Good on you!

Thanks for sharing.

Raymond, They are offers NOT contracts. You can't breach an offer. All we are doing is telling sellers we will buy your property for xx amount. In almost all cases our ofers are not accepted. Thus far we have only had to cancel one contract after all parties had signed. It was canceled after the inspection because the bank forgot didn't disclose that the entire HVAC system was missing from the property!

I'm surprised how many people believe this technique to be illegal or unethical. It's NOT. Until there is a contract there is nothing. Once there is a contract then we would certainly have to abide by the terms and conditions that were agreed, Including buying the property "As Is" with right to inspect.

The REO agents love me because I bring them good qualified buyers that are ready to close.

REO's are definitely frustrating. ......and it's easy to criticize the REO agents. I wish I could get some REO listings!!!! I swear, I would answer the phone! if for no other reason, than to shock the Buyer's agents, LOL.

Actually, here in GA the Purchase Offer has a box to check for the buyer to either have or not have the right to enter into a contract on another property... and asks if the buyer is already involved with another property...

It might be good to disclose anyway... let them know that they aren't the only game in town.

BB - well I am with you on this. Almost all the buyers who are in the lower price range are making multiple offers for the very reasons you state. We are careful to formally withdraw in writing if need be. Escrow doesn't open until you have a signed contract so no money changes hands if you write the contract correctly. The big problem is even finding out if your offer has been received, or getting any other information at all. That said, there are some REO agents (working with a couple now) who have been terrific.

Jeff

I have buyers that are requesting I submit multiple offers and some don't even want to look at the properties until they get a positive response from the seller. I can't say I blame them. They are getting very frustrated with the process and just want a chance to own a home. I have even had buyers contact me who were using another agent and are dissatisfied because they haven't been able to get a house. What the heck can you do?

Broker Bryant, you are playing the game that the banks have created with their backwards-REO systems. Your client is entrusting you to WIN at the game -- whatever it may be -- and you're doing a great job.

P.S. I've seen some properties with over 40 offers because the investors are all out shopping right now!

BB,

You're doing what a good buyer's agent should do--protect your clients. If an offer has contingencies, they are there to protect your client. Exercising those contingencies on occasion may be a pain in the butt for the listing agent and may not help other buyers in other bidding positions, but you aren't getting paid to represent the other parties here are you!

If I remember correctly, there are contingencies galore for these REO and Short Sale listings, making your buyers sign pages of legalese that is there to protect them, not your buyer.

I think protecting your client and presenting offers in their behalf that are legitimate is what we are paid to do, and have a fiduciary responsibility to do. I've not seen anything in the code of ethics that disputes this, assuming we're all Realtors.

Good luck with your business!

Kevin

Buyers want what they want and until they get tired, they still want what they want.

The listing agents expect multiple offers at the prices that they are allowed to list them at. If you want your clients to be successful, it's what you have to do. Otherwise you're writing offers for months for one client. Implement fast!

It's funny because these REO sellers are now getting a little "payback". I've been advising my buyers to present multiple offers for quite some time. If the banks can solicit multiple offers, send them all back, and ask for a bid war via "highest and best", then the buyers can protect their interest, time, and gas by presenting multiple offers as well. It's basically the same game in reverse.....so there!

Thanks for your feedback Paula but you are obviously not reading the same contract that I am. Lender acceptance is a contingency in the standard contract with Short Sale Addendum in FL.

In my market, it is nearly impossible to get an offer accepted on an REO if your buyer is financing with an FHA loan and 3.5% down. But, that describes most of my buyers. Not investors, just first time buyers who want to get into a home they can afford. All of the REOs in my area are getting multiple offers. A couple of weeks ago there was one house that received 60 offers. My buyers are getting tired. My contracts usually expire after a week, and most of the time banks don't even respond before then. There is very little inventory here, but tons of buyers. I'm seriously considering using some of the tips here, including the Notice of Withdrawal. I have written 21 offers for one of my current buyers, but not all of them at the same time, so it has been a very long and drawn out waiting process for my buyer.
It must be a nightmare to keep track of 14 different contracts, 14 different deposit checks and filling out the brokerage Trust Log. You do require 14 different deposit checks, correct? One for each property?
One other thing: several people here wrote about buyers needing to see the property before making an offer. What about all the properties that are in the MLS that say, "drive by only. Make offer subject to inspection"?

Bryant stated "They are offers NOT contracts. You can't breach an offer. All we are doing is telling sellers we will buy your property for xx amount."

You might want to call your local DA and ask them! I'm having too much fun here. ;)

Seriously, in California, the real estate purchase contract generally is the buyer's offer to purchase. When accepted by the seller, it becomes a binding contract. At that point you will have to use one of your contingencies to walk away. So as long as you withdraw before acceptance or if the offer is countered, only then you are fine.

Bryant, Enjoyed the post and responses and I'm facing this exact same situation here in South Florida. I've already lost one buyer to the disheartening number of competing offers at the top of his price range. I don't see how it matters to listing agents with the high number of competing bids on many nice properties, well-priced properties I'm dealing with today. It is likely that I may be withdrawing offers prior to some of the others being accepted anyway, or at least that's the way I would proceed.

I love your posts - you tell it like it is!

Why not do what the REO's do to the buyers?

The REO's sit on contracts waiting for multiple offers all the time. There's a time clause in our offers which can be a short time period and the REO properties almost never responds within the time frame. When they do respond it's with addendum, which is a counter offer that changes the terms of the contract. The buyer does not have to agree to the changes and can reject the counter offer.

Turn about is fair play.

Interesting discussion here. What I'm seeing on so many of these discussions lately is such an ethical divide between agents. Many of the comments seem to echo that it's okay to waste the LA's time, because "turnabout is fair play" and that you're only giving back what you got when the market was hot. Does anyone else see the problem with that? Unless you're all buyer's agents exclusively, then you're basically advocating the poor treatment of fellow Realtors. I know that this is a business of independent contractors (I've been in it a long time), but I can't help but notice the tone of so many blogs lately on AR that are downright nasty toward others in your profession. That's just not something you see in other industries. If you're doing something that is in the best interests of your client, and if it's legal, then by all means do it. If your justification is that it's okay to play games with LAs because it's some sort of karma for past misdeeds, then it will come back to bite you.

Oh, and in some states a signed offer need only be faxed to be "delivered" and considered an acceptance. Check your legals on that, as your mileage may vary.

Hilarious...the listing agent getting what he/she has dished out for years.

Good faith and implied covenant? HA! I can not count the number of times the listing agent has used the old "I just wanted you to know I have another offer coming in" routine. I am sure he was acting in good faith by telling me through implied and usually false comments to raise our bid.

Writing 14 offers for 1 client on a computer will easily be done in short amount of time...and hey...you save on gas so youare sticking it to the oil companies as well...

Go for it!!!

Trixie...i would like to know what state allows a faxed offer to be considered automatically accepted by the seller.

I need to know so I can tell my relocating clients.

As for bad karma or revenge...nah...and actually if we are working for the buyer we owe them the best job we can do for them and if this what needs to be done...then so be it...

I suppose it is okay for a listing agent to have multiple offers in your opinion? By the way...in whatever state you mentioned before...that obviously would not be a problem as the first one there would get it and the next one that was five minutes and $50,000 higher would not? Don;t make sense to me.

BB: If your buyer is willing to buy multiple properties this is a great way to do it. If they only intend to purchase a single property, what happens if they get accepted for multiple contracts and can't purchase but one.

Bryant are you feeling like you are on a blacklist for the REO agents in your area and that they read your post or had an idea that you have a 50-50 chance of withdrawing your offer when it comes time on bank approval?

I cant stand the REO brokers that have you fax in your offer and you talk to an automated machine and they dont even have any real full time realtors it seems that can make the process more than impossible.

gail said: "WE (realtors/agents) are the ones with access to the buyers. STOP JERKING US AROUND."

AMEN! plainly, and well said. As the banks inch up their prices to market value, provide no warranty, assle around with contracts to the point that buyers get fed up, make us deal with no-clue admin staff who wouldn't know a home inspection from a hole-in-the-ground... what are we to do??

BUT... dear Bryant... you're playing a fast and hard game, making 14 offers for one client. While the law of averages says you're going to be okay, what if you took a ... breather... for dinner, say, from your cell phone, and go back to get six acceptances of your offers for the one client, who can really only buy one house? didn't they have to write 14 earnest money checks? Or did they write one and you photocopied that to send for all 14 offers? Dangerous, dangerous... I think this way is why some of the banks are now demanding EM checks to be made out to the closing agent (attorney/title company, depending on your state) and submitted with the offer. Therefore, we can only do one at at time. has your way made it more dificult for the rest of us in more stable markets? Just asking...

The bottom line is, if a buyer doesn't want to purchase, there isn't really much that can be done. Sure, there is the earnest money issue, but apart from that, I would be surprised if there were any significant barriers at a macro level.

Great discussion. I agree with Carla that "all's fair in real estate". How fair is it when the buyer backs out over a Feng Shui inspection? Unfair stuff happens all the time!

I too am a non blood sucking agent who actually helps clients with short sales. The people I helped were treated with the same fairness and consideration that any other client would be. The first step there is to make the client aware of ALL of their options and not to just pop a sign into the ground as a short sale. Same as for a divorce, etc. My clients need to be educated so they can choose the best option for them. Most of the agents in my area think short sales are a waste of time too. That's just fine with me.

I have made multiple offers on REO's with clients many times. Only ONCE did I ever have to withdraw the offer, and I did that BEFORE the bank ever responded.

I can't wait for the days of a balanced market where one party doesn't feel the need to scalp the other and we don't have so much financial distress skewing the market!!

In the lower price ranges, the properties are going fast with multiple offers, and it's tough to compete. I can see multiple offers being a solution.

Susan,

I agree. In my contracts for Short Sales I write: EMD will be deposited with escrow holder within (1) business day of Buyer receiving written acceptance by the BANK.

FOR REO's, I write: EMD to be deposited within one business day upon Buyer receipt of signed contract by the Seller.

The only way I have been able to NOT have the EMD tried up in an escrow account for months only then to find out the offer is not accepted. Then you have to go thru the entire release process which can take weeks also.

I do this all the time. I had one agent get really angry at me when after our offer was accepted we declined to go into escrow. I told him they take multiple offers we can make multiple offers.

Waves of praise to Jayne for "Price Escalation to Agreement of Sale" I LOVE that! . . . . not that many of the realtors I deal with would understand what it means! But it might make the seller who reads it know that your buyer is committed beyond a shadow of a doubt to win the property and is willing to pay up. Jayne, it is because of posts like yours that I stay educated and inspired by Active Rain posters. What a crowd!

By the way, to those of you who are chapped off at "those REO agents with 200-300 properties" that don't return phone calls or present your offers: COMPLAIN! I list a moderate amount of REOs and am on good terms with the listing specialists. They DO listen! I have gotten listings because some nincompoop agent didn't (or wouldn't) do the job---which yes, does include presenting ALL offers! When you receive a counter or any kind of information from the servicer, it will have the address for the company on it. COMPLAIN! Don't be whiney about it. Just state the facts and let them know that their listing agent is not serving them in a professional manner which does not get the best result for their client. They really DO listen. You are often the only way they would ever find out otherwise.

Great way to go about dealing with the current status of the market. I certainly have no problem with it as a buyer's agent. It could as a listing agent get frustrating if I had to deal with this on a regular basis however my job would be to generate interest and if the bank wouldn't respond back in a reasonable time then its their fault more then the fact that the buyer walks.

I would think you could use that accepted contract if other potential investor clients if you would in an "and/or assigns" reference or other language to be able to replace the buyer once you got an accepted offer for a property.

Glenn

I'm a little bit confused. I assume these are all verbal offers? If they're in writing, what if the seller signs the offer and you now have a bilateral contract on multiple properties, and the buyer wants out of some? And if these are verbal, what listing agent is taking it seriously? I present verbal offers, but I then advise my sellers to counter with "put it in writing". Or are you only talking about REO listings?

JUN

2009

Really great comments! Some I agree with, some I don't. So interesting to read how differently agents work all over the country. We have to work hard for our buyers while remaining true to ourselves. Being nasty and vindictive towards other agents will come back to haunt you later.

That is fair. REO agents are playing that game too, and we all know that they also want multiple offers and take the best one. I have placed offers on properties we have not seen, but will check them while waiting for answer. Why waste days and weeks to get another offer placed if you are not even sure you get the property you just offered. The more offer you make the better. So take a lot of copies of purchase contract with you when you show properties.

Charita King

www.charitaking.com

Century 21 My Real Estate Co.

The interesting thing to me is that all these agents from different parts of the country are saying how busy it is and how many offers there are on each home and how difficult it is to buy one. It's really that way in my market in San Ramon Ca.

But, when will the newspapers report on any of this?

Bryant,

I agree with your approach in the circumstance you describe. Obviously, it doesn't sit well with everyone, but it is sound to me. Thanks for sharing.

Bryant,

In our market I'm starting to see REO LA's put the bank addendums on the MLS & require buyers to enclose them with the offer to puchase. I haven't done that many REO properties because of the repair cost condition of the properties but on the ones I have submitted the LA's have told me if there are multiple offers on the properties & they have told me that they have been waiting xx number of days for a response either by email or phone. The LA's also complained about the banks taking so long (tired of repeating "no response yet to my inquiries").

A solution I found sometimes works (esp. if I have the only offer on the table) is I put an acceptance time frame of 10 days & follow that with the legal phrase "Time Being Of The Essence" that allows my buyer the option of cancelling after 10 days & move on to the next property. One LA sent me a signed contract 13 days out & told him so sorry but we moved on to the next deal in accordance with "Time Of The Essence" condition & currently have a pending deal. Didn't like it (property set for another 3 mos & came under $2,000 less than our offer) but understood & would let the bank know they waited too long to accept the offer.

I think if more of us put these conditions on our offers & stick with it, maybe the banks would get the point that our buyers are tired of their games so we're going home & taking our "ball" with us. LOL

BB,

Great Topic, great begining, can't wait to see more people speak up. So many have chimmed in to offer their 10 and 20 cents worth. But I want to say "TIME-OUT!" Am I from a different planet? I hope I am not as alone as I feel. Maybe I need to be placed on another planet but if I must go I want to take with me Raymond, Lisa, Loree, Gene, Gail, James, & Kathryn (because your dog is cute).

Bryant, I know you are trying to serve your client to the best of your ability but I think you can do an even better job for them by just picking the best property with them & getting it for them. You may loose some battles but you will win the war. All of this talk about sticking it to 'em, treating them the way they have treated us for years, playing dirty, fair-schmair, payback, turning the tables is really very enlightning (and scarey). I am pretty sure we will never meet, but I want you to know that I know the pain of showing multiple houses only to find they already had multiple offers at the bank before you are even back to your office, or writting an offer over list only to find you had been out done by another, then weeks later to see a double dipped offer for $30,000 less. This market is creating new situatons but not new ethics. Ethics are timeless. Let's All try to learn to serve our clients the best we can but let's not forget to use the Golden Rule. It is even part of our Preamble. Our forefathers were smarter than we can imagine. To best serve our clients is very important but to do it with the hifghest level of ethics is what sets us apart from all the other sales professions.

If I were in your market representing REO houses I would be telling my sellers about your practices as I presented your offer at which point the topic of your offer's earnest would come up and I would imagine your offer would be passed up for a serious offer. I believe a purchaser should write the offer in true earnestness. Not as a shotgun blast hoping to hit a target they might not really want. It may be different for an investor but they should be ready to buy all 14 if they are accepted.

As I read the comments I see support from top agents from all over the country. But as they support your multiple offer statagy they also note it may not be fair (hmm? not fair, is that part of the Golden Rule?). I did read most (not all of the comments) and was suprised at how many of my fellow REALTORS are receptive to these practices. I hope we can all end up on the same page.

Thanks for the great topic! I wish you well and look forward to reading more later.

Respectfully,

TODD LANDS, Associate Broker, GRI

WHEN YOU THINK OF REAL ESTATE, YOU SHOULD ALWAYS THINK OF LANDS!

www.MICHIGANLANDS.com

With the average contract here in MD being about 30 pages, how do you have time to write multiple offers

Playing dirty - I don't think so. First I have no love for the banks because they created a big part of this and make it insanely difficult to get a buyer their first choice. I am closing a buyer on Monday where we wrote 8 different offers 8 different times though and got to the point where he said, please I will not look at any short sales or foreclosures. We are closing on a regular sale.

I do protect my buyer though with a contingency that they are allowed to place offers on other properties. Since the banks (not short sales because they are between buyer and seller NOT THE BANK) take forever to respond and they always send addendums back to sign on the buyer side that is not a problem with multiple offers out there.

And yes here in the DC metro area our contracts are 30 to 40 pages long.

Good morning one and all.

OK let me clarify some stuff. This particular Buyer's 14 offers were made 4-5 at a time.

They is absolutely ZERO chance of the seller signing the offer and placing my buyer under contract. ZERO. The reason is because ALL lenders have bank addenda that are not delivered until after they have given verbal acceptance. Then and only then do they send out their addenda. These addenda not only have to be signed by the Buyer BUT they have to be returned and THEN signed by the Seller and RETURNED before there is a valid contract. By buyer will NEVER be obligated to close on more than the properties he wants.

I'm a very smart man. I would never compromise myBbuyers by having them obligate themselves to more CONTRACTS than they can handle.

I am in no way trying to get back at the listing agents. In fact most of the REO agents in my area are friends of mine and WANT to get my offers accepted. But of course their hands are tied by the lenders. It's the Lenders that have created this mess not the agents.

If anyone things what I am doing is illegal or unethical well.......you're wrong. It may be aggressive but that's all.

This is also not something to do unless you know what you are doing. The key ingredients are an Investor Buyer with CASH and an institutional lender.

Interesting discussion.

So long as there is no breach of ethics (and in making multiple offers there is not), I look at it as smart "out of the box" thinking that's a win/win for both you (hooray - you get to pay your mortgage this month and EAT) and your client (they get a HOME where in some cases needs to be within a certain timeframe - lease, tax credit, grant money, etc.).

You have to ask yourself as an agent how would you feel if you thought for a moment you cost your client unnecessary $$ - or even a home they loved because you were not aggressive enough in your strategy.

I've had REO listing agents actually come back to me post-selection (by the way, in an REO situation you officially are countered when selected, not accepted and ratified) and ask if I'm sure my buyer wants to move forward (or did they change their mind). And of course multiple offers means just that...the bank will have others to choose from if you elect to withdraw.

Given market conditions in some areas (I'm in DC/NoVA) we're left with no choice but to step up our game...or we starve.

(Bless Docusign - how we effortlessly submit multiple offers)

One more thing. Please read my post and my comments. I can't stress enough that I am NOT out to get anyone. I'm in no way trying get back at the Lenders and the REO agents. It's important to me that you understand that. The intent is to BUY the property. I have time to write multiple offers because I am not showing property. I can write 4-5 offers in about an hour.

You have to be very careful when using aggressive real estate tactics not to cross the line to unethical behavior.

Bryant:

To this I sing Amen! (coming from the Amen Sisters' Choir in the Hallelujah Corner)!

I have been doing this for some time, and it works very well. Just got another REO offer accepted this morning, and that's after writing 7 offers in the last 2 weeks for this buyer.

Further, I have adopted the "backup offer" strategy and got another buyer's offer jockeyed into first place on a short sale after the previous buyer walked away. (Guess I should blog on that one.)

I was really nervous about this multiple offer approach, but it seems the only way to get in there and get my folks a home. My broker backs me up 100%, so let the games begin!

Barb

In Georia, we have to diclose. I'm submitting 2 offers today, not for an investor but for a buyer who will occupy. Either home works well for them and in the Atlanta area we are seeing a lot of homes w/ multiple offers.

I don't really see any choice considering the current market conditions. I have done that before and will again if market conditions dictate the need.

I loved the post about collecting offers. Recently my offer was first offer in the gate, full price and no closing. Slam dunk--right? NO! Two weeks later I get a highest and best form then loose the house for my first time homebuyer. I have now moved even my first time buyers to that terrible practice. They don't get a chance to shop because if they do, the house is gone or in a bidding war.

I have done multiple offers on both sides of the transaction. I don't see a problem with this way of doing business.

Almost forgot after reading so many posts. I love the picture. Tere

Bryant, I believe these days of banking chaos and their complex middle-man system, agents working with buyers are hand tied and in the dark with these type of listings. we have to tackle the problem to get results....it must have taken you 14 times the effort to write and present the offers... good for you, at least you got even better results. Do you do the same with owner occupied buyers?.....

I might also point out that in Georgia, only if we offer under due diligence do we indicate multiple offers. If you offer as-is ( which is the what every REO is ) you do not indicate. Today I am offering on 7 for one buyer and 3 for another. Yes, a ton of paperwork, lots of trees die and at these prices very very small commissions. At 30K a house and a 3% commission...a girl can't survive on that!

Interesting discussion and even more interesting tactic. But the lay of the land has changed - so must our approach to buying it.

Virtually the same thing here. REO brokers here are often a nightmare to deal with. This isn't unprecedented- in the hot market in Manhattan, sellers would send out multiple CONTRACTS and deal with whomever signed first. Those days are gone, but when the competition gets hot, things get out of balance and you have to adapt. I haven't read all the comments and I am sure some will decry what you are doing, but all markets are local and protocol can vary with the zip code.

I don't think you are playing dirty. Since when is doing the best you can for your buyer dirty? In this market you need every advantage you can get. I bet you get referrals!

By the way, this is the response I get on aboiut 90% of the offers we submit.....

"If buyer agrees it is not an accepted contract as seller reserves right to continue to accept other offers and is not a contract until signed and delivered by all parties."

Thanks for the blog about multiple offers. I have had clients "bidding" on properties along the coast of Alabama that REO agents have listed at way below market value for the simple reason that they want multiple offers. WHY? In most cases the property has sold for more than it was listed for but if it had been listed at market value it would have sold for even more and there wouldn't have been multiple offers so on and so forth. Some REO agents don't work in this area even, they take a listing, send an assistant over to put a lock box on the property, post the showing instructions in the MLS and collect a check. Banks amaze me at their inability to conduct business! Would a true seller hire someone in another town that knows nothing about their property and has never even seen it to sell their property?? I don't think so. As for myself I would not take on a listing in a town where I could not engage in the marketing process it would not be in the best interest of the seller.

Bryant - To clarify - I think I get it - your buyer has certain criteria, and WANTS To and WILL buy. Your market is so hot with multiple offers on foreclosures- the buyer's chances are slim of getting any even at full price. SO, if one gets accepted, the chances are equally strong that your buyer WILL proceed. In that case - it makes sense what you are doing. It also seems not to be too much extra work for a listing agent in your area, since they are already dealing with multiples on almost every REO. Wild market.

Playing dirty??? HAHAHHAHA! Playing dirty - submit offer and ask for response. Day one, no response. Phone call for receipt (nothing else, don't want to bother you, just a receipt please.) No response. Day three follow up email "did you receive my offer for buyer xyz?". Cricket chirp.

Somewhere between days 7-30 (I am only talking REO here) the property either goes contingent or pending in MLS (our discovery) OR we are sent addendums via email with no call. No solid rejection, no phone call if the property is lost. If we get the property and the addendums it is "I NEED THIS BACK IN ONE HOUR FULLY SIGNED BY YOUR BUYER." Yea have fun with the investor buyers who may just be sunning their buns in Hawaii or FLorida on a beach somewhere. Then damage control ensues and we need to find the lost broker to ask for another half day to get the addendums that the $8 an hour assistant sent to us with no phone call for those 10 days prior.

We are constantly being set up for failure and we need to do something called "damage control" and I do put a kick out clause in my contracts!

It would be nice if all agents "rolled" like James these days but the hard reality is they do not! I do know which of the few do and I do stay in contact with them in respect that they allow themselves to be put out there (without bugging the crap out of them) but it is rare!

I do multiple submission too. It's hard to get OO first time buyers to write without seeing but investors do ALL THE TIME! I just had one instance where the guy intended to purchase one and ended up with 6 acceptances (14 offers written.) He decided to take all six. One got thrown by the wayside because he didn't like the CCRs but heck, I got 5 escrows on one investor because of this method you described!

I want to also address the anonymous comment and others about bank pricing. They price based on BPOs and usually ask for second chance BPOs from other agents. They also conduct BPOs before and during the foreclosure process from agents and appraisers not involved in the practice. List agents generally DO NOT price REO, the sellers do.

Also, taking REO listings DOES suck. Many agents don't want them because of the involvement with evictions, trash outs and the holding costs. Your coffers can get drained quickly if you don't have the reserve funds or systems set up to handle several listings.

Great Post and a lot of replies. I am a short sale listing agent. Recently I had a offer, then contract on a short sale. I normally only give 1 offer(contract) to the bank as more than that confuses them. The bank worked the file. I kept in contact with the buyers agent throughout the entire process. When the approval came in I called the other agent and had to leave a message.I sent him the written notification of the bank approval. I called him the next day to confirm his buyer was still in. He said yes. I reminded him of buyer obligations on escrow, inspections etc. Next day called him to tell him I had changed supra key to a code box for his inspection. Two days later the buyers agent called me and said, "oh, didn't I tell you my buyer moved on and bought something else?" he put in 5 offers on the same street and was confused about which property I was referring to. From that point on, I do not take any offers on short sales without escrow at time of offer. Fortunately I was able to substitute the buyer and sell the unit. When a buyer doesn't have any "skin" in the game and an agent who can't babysit multiple offers, we are all left holding the bag.

I agree, multiple offers should be disclosed and the agent submitting them better be a good babysitter.

We ran into this when we went to the current system of requiring the buyer to actively remove contingencies. When it was a seller's market, some buyers would tie several properties up until it came time to remove contingencies, then decide which one they wanted. Personally, I have a problem with it as it a) denies the property to bona fide buyers, and b) smacks of bad faith. I guess I have less problem with it vis a vis REO's since, at least around here (So Cal) the REO agents tend to have a pretty cavalier approach to the business and are very callous in their treatment of buyers and their agents. I have a bigger problem with the current fad of merging MLS's, but that's another issue.

Bryant, I understand where you are coming from, I am in Miami so imagine how I feel. I am working with several buyers & it's the same thing. I have not put multiple offers but like you, none of my offers are getting accepted & they are also good offers over listing price, good down payment etc. Just yesterday, I had my buyers drive by a property listed as a short sale & ask if they could see it. I told them since the agent was not getting back to me to just show up & ask if they would be kind to show it to them, so they did & they were able to see it. I have been working with them for a long time & I know they are loyal. It's crazy out here, I don't get call backs, I constantly have to be asking if there is a contract accepted because they are not even showing PS nor B on the MLS etc... I get very fustrated! Good job, if you know the tricks of the trade why not????

I've been a broker since 1985 and had always been taught that you should negotiate one offer at a time (from the same buyer). however, that was before buyer agency came to our area. It seems with submitting multiple offers that you are trying to do the best you can for your buyer, which is what the law requires you to do. Also, when marketing REO listings you generally have little input on how the owner chooses to negotiate. The REO companies have put the buyers in a position where they can make an offer in good faith, spend money on inspections and at the eleventh hour, have the property pulled out from underneath them. I say, do everything you can to help the buyer get the property he/she wants at the best price for them. The banks are trying desperately to re-coop the losses they incurred when they gave mortgages to anyone who could fog a mirror.

Bryant....Great topic! Although I have not written multiple offers with my buyer's on REO's, I may start that strategy soon. I just had some first time homebuyers I put into a home. We wrote offers on 3 REO properties, 2 of them more than the asking price. We lost all three. On two of the properties the listing agent never bothered to respond. It took me 3-4 calls to get a response from their "assistant". The banks are not held to any standard of ethics. Why should I play their game? When we are held to an ethical standard, and the banks do whatever the **** they feel like, the system is broken. And as far as short sales, I have quit recommending my buyers even consider them.

I have read post in the past that agents have problems with this. I do it but not that many ...maybe 2 offers. There aren't 14 here worth making an offer on.

I think making mulitiple offers is a great idea and I don't know of anywhere where it says a buyer has to go SEE a property BEFORE making an offer on it...

We tell most of the buyers we're working with to put offers on multiple properties - Many real estate agents don't like it, because that's not the way things are traditionally done.

The good ones do it & are much more successful at getting the buyer into a house quickly.

My understanding here in California is that you have to disclose to the listing agent you are making multiple offers to different properties.

I disclose it anyways , it doesnt hurt, I usually call the listing agent let him know that if the offer does get accepted, and we are still not in contract my buyers of course would either accept or not depending on the terms.

If i was a listing agent in a particular transaction I would like to know because then I can let my buyer know .

.02 :)

Edit: Let my seller know :)

Jackie,

So you want my clients to open escrow, and place the EMD in escrow, when we present you with an offer - then wait several weeks or even months to get bank response. Then probably wait weeks to have the EMD released back to my Buyers!

Are you kidding? Why would any agent, anywhere allow their clients to get into that situation!

bryant,

i am convinced that your practice is the wisest option given the nature of the sellers in your area.

your clients business is theirs alone and i can't think of a single good reason why you'd want to disclose confidential info regarding a clients business plan. in fact, i will suggest that if you do disclose the practice of your client then you may dissuade the seller from taking the offer seriously and reduce their chance of having it accepted. if asked i would disclose it, but not before.

the ridiculous policies of the REO owners has made your clients' practice nearly mandatory. i've had a full week go by with zero communication from agents peddling reo's...and then it is a cryptic email demanding our highest and best offer. a full week, and they want me to counter our own offer? sometimes we do, other times we alert that we have moved on. i'd love to see the lender that whines that a buyer jerked them around.

as long as your offer is made in good faith and you have knowledge that he is able to perform on the offer then i see no legal ethical or moral breach. i do see solid client advisory that the realities of the market require this.

of course their is no requirement for an offeror to inspect a home prior to making an offer. again, their business practices are theirs to determine.

BB, good strategy that I'll putt this in my bag of tricks. If the market wasn't what it is and the banks who they are - you wouldn't have to do this would you? It's not playing dirty, they're just mad they didn't think of it first. Congrats and cash those commission checks!

It's only the obligation of the seller to say if they are countering to multiple parties, not the buyer to say they're doing multiple offers. And in this market, pretty much anything flies, and a bank or seller can't demand a deposit until all contigencies are removed and then the buyer defaults. So good for you for getting ahead of the game! Cause that's what it seems to be right now.

I know for certain that many of the REOs I list get contracts sumbitted sight unseen. My tactic in return is to simply not put them sale pending until the last possible minute that I can. That way the property loses little to no marketing time in case the buyer changes their mind.

On the same note, I personally along with many of my investor customers have made hundreds if not thousands of offers over the years on properties before actually seeing them. Heck between knowing the neighborhood and looking at the photos, all that really matters is the numbers. Probably 80% of the time the offer does not get accepted, so why bother driving all over town unless the seller is willing to at least negotiate close to a good price.

If a seller encourages and looks at multiple offers, then a buyer can submit multiple offers, too.

I do this as well...thank goodness fo DocuSign because we can write offers quickly. I also make sure I have current copies of the buyer's financial statements as proof of ability to close the transaction.

You're not alone. And yes, this is one way of looking after your buyer's best interest.

Ther is nothing wrong with it - except you aggrevate the problem with the multiple offers. But this problem is the making by the lender REO policies - not the making of the potential buyers. YOU cannot single handedly change the world. And in the meantime, throwing up a lot of mud on the wall is apparently working.

This REO procedure is different than the multiple short sale problem we see because the selection process can take a lot less time and if your buyer backs out, that will happen rather fast and the lender already has the backup in hand.

Great response BB - you make me look like an amateur! Speaking of that -- All you HAMS - don't forget that this weekend is Field Day!

Regards, WB2VGL - Richard Zaretsky

That's why we have ZipForms! It's the only way to survive in the current market. Why not increase the odds of scoring a great deal and being the hero to your buyer, and getiing a client for life! They probably have friends and business associates that they'll be sending your way for the same great deal.Way to go!

Hey BB!

I like your style. You do what you think is best for your buyers, and that's all you need to do. If it makes a listing agent upset, well too bad. That's the way it goes today, in the "buyers" market. Great work IMHO... :)

-Lisa

Wow...so many comments I could not even read them all. Maybe this has been said over and over, but it all depends on who you represent, how you deal with this. We are supposed to do what our clients ask us to do, and provide professional advice of course, and keep it all within the parameters of doing what is legal and what in our book is ethical (since there may be a difference of opinion on some of the issues). There are times when we may have to refuse to do what our clients ask, but this here does not seem to me to be of concern. The real estate climate has created a situation where we need to take different measures to be able to effectively represent our clients. Here is Washington State we are also dealing with the abundance of short sales and bank repos in the first time homebuyer price range (which of course is attractive to investors etc. also). Makes it tough on the first timers, so we need to do what we can to make things work. Who are you supposed to be nicest to, if not your clients.

Hi Bryant. I am glad you put this part in bold:

I am only doing this with experienced Investors with cash AND only on REO properties.

This is key for many reasons. As already mentioned REOs plus cash buyers are a whole different ballgame coupled with *experienced* investors.

Well I have to say .....you guys out did yourselves on this post. Excellent comment stream. I hope this conversation has helped someone navigate these difficlult waters.

Don't let this market defeat you. Just figure out how to adapt your business practices to make it work in your favour.

Bryant that's just the way it is in the REO buyers market. I'm here in San Diego and do A LOT of work as an REO buyers agent - I would say about 80% of our buyers are buying REOs. And just like FL these properties are ALL getting multiple offers within the first 24 hrs...I've even seen some getting 30+ offers. It is an absolute feeding frenzy!

You're not doing your job as an REO buyer's agent if you just put out one offer and then pray that you're the one selected. It's just way too competitive for that. We tell our clients to shoot first and ask questions later. If they can't get out to see the property right away and that will delay them putting in the offer then in many cases they will be too late!

You know how the system works and you use it to your client's advantage. What is wrong about that? Nothing. Great job! Personally, I would hesitate to submit multiple offers on short sales, since one never really knows when the lender is going to say "yes" and there are no additional addenda required unlike on bank owned listings.

Is anyone here doing this for FHA buyers?

JUN

2009

To someone above--(I've been reading the comments for a long time, he he)--Typically, the bank Addendum will have a clause that states they will not accept offers with an Escalatory Clause (b/c it's unfair!). Personally, I don't think it's unfair for that clause, just smart.

The REO market landscape is changing how buyer's agents must do business. I don't think submitting multiple offers is in any way 'playing dirty'.

I don't know about other states, but in Southern NJ an "offer" and a "contract" are two different things. An offer is not a contract until CONTRACTS are signed. Even if you have "offer and acceptance" (verbal in my neck of the woods) it's still not a contract. During the boom times I always had buyers narrow their choices down to two or three and then make offers on all of them. Whatever seller accepts the terms is the one they went to contract with. Some of the comments above talked about buyers backing during out during inspections. In NJ, the inspection only happens AFTER the contract is signed, so that issue wouldn't be applicable here. I say make your 14 offers and go for it.

Hey Bryant,

I've been doing this for buyers for years, REO, short sale, whatever. Us guys seem to get confused by our fiduciary obligations to our clients and fail to understand the perspective of the other side. Agents talk of win-win a lot but almost always go for the WE win.

There is no reason on God's green earth that the playing field shouldn't be even for all players. Until it is, if ever, advantage will go to the smartest and losers will rail at inequity(as they see it). And... for sure... my clients should always win.

The disinformation & misinformation in the responses is interesting. Almost everyone has it right but there are always less common places to place ones head.

Thanks for the fun.

I think in this market that a buyer especially in a price range of under 200K needs to make multiple offers if they stand a chance of getting a home. I disagree though that they need not look at the property. I think if they are willing to make an offer and you spend your time that you the buyer should look at. Unless he or she is an investor and trying to buy it dirt cheap, which doesn't happen much any more too,

Interesting how business is handled in other parts of the country... In Hawaii we are required to disclose the fact of a "multiple offer" in an addendum attached to the offer of purchase contract. Do you have to collect an earnest deposit amount from your client with each of the offers? Are they willing to do so for all 14 offers?

JUN

2009

I submitted 5 offers and showed all five houses over a week ago. How many responses did I receive, 1, a rejection. Some of the agents haven't even confirmed they received my offer by email or through a return phone call. It's very frustrating, and I understand completely why agents are writing multiple offers without even seeing the properties.

JUN

2009

I think in the situation you are in you are just doing what is best for your client. I ran in to this problem a few years ago with a buyer and one of my listings, the problem was he wasn't backing out before the acceptance, he was trying to use timelines to back out of the deals. Well, on ours his agent and him missed the inpection dead line and so when they tried to back out based on the inspection (That never really took place) I held their feet to the fire and keep the earnest money.

Todd Clark - www.LivingBeaverton.com

BB,

All I can say is, if I were an investor in your area, I'd hire you to represent me!

We have to include ernest money with an offer and would be very careful about submitting multiple offers on a regular basis. If other Realtors find out, they are likely not to take your offer seriously. Also, if the buyer hasn't seen the property, I would be very cautious as well.

JUN

2009

Playing dirty? Are they kidding? It's not playing dirty when a seller looks at multiple offers or puts off buyers waiting for more stuff to come in. This strategy could go a long way to help the agents who do a lot of REOs and the banks who are listing them to streamline their response times.

Ok I think I'll write a quick follow up post to answer some of the questions and explain further how this works.

JUL

2009

Hola B. Back in the day when I was buying a lot of property it was very common to write 10-15 offers a week and also go to the Sheriff Auction and bid on another 20-30. We were trying to buy one a week. Thing is, I looked at every property I offered on. It was a full time job.

Wearing my asset manager hat, I can tell you that my first question after reading an offer with a "buyer walkthrough" clause is : Have you even been in it yet? Possibly in your market things are different, but here there is about an 80% chance that the deal is going to change considerably after the walkthrough. With those odds, it isn't worth the effort to negotiate a deal before the prospect views the property.

JUL

2009

I am in a far different market than you are - my only fear would be with so many offers that several would be signed and than the buyer is under contract with too many houses. In NC that points to BIG trouble. Different area - but I would sure have an attorney make some kind of loop-hole to get the buyers out if needed.

Now as far as selling "sight unseen" I have sold two houses and the buyers didn't see them until a few days before closing. Again, it's done here because I'm in a resort area. Our contract even has blocks to check "have seen property" "have not seen property". Still it worried me a little, my thought, what if they hate the house when they do the final walk-through. This didn't happen (well one couple didn't love the house but they still bought it).

JUL

2009

Nice approach Bryan. Florida sounds a lot like California right now. That is very much what I am doing right now and it is working for me too.

AUG

2009

I read this post late one night about a month ago and was so excited. We have an investor who buys multiple houses and is so frustrated right now driving around looking at the home, writing offers, waiting, and then getting rejected. I couldn't wait to get to work the next day and Tina and I got right on the phone w. the boss and told him all about this great idea, I even printed the post for them to read. We think this is absolutely BRILLIANT!!!!!!!!!!!!!!!! Why this works for us... the investor is not attached to any home he makes an offer on, it's all in the deal, if the deal is good he will take the house. Further, if multiple offers got accepted, he would be thrilled and buy multiple homes. We have been using this technique for the past month, writing offers daily, before seeing the home, which saves invaluable time. As well, since we have multiple offers going on we can walk from frustrating deals such as listing agents refusing to submit offer because you won't sign their unilateral contract/listing addenda (stating such absurd things such as buyer agent to be responsible for turning off water values, faucets.. and the seller doesn't sign this just buyer and buyer has to sign before they will even submit an offer??) *** on the subject of not seeing the home and the bank just signs the contract and sends it back, no changes or addendums so it because ratified and the buyer doesn't get a chance to go out and take a look first **** please, you would have a better chance of seeing a flying pig do a touch and go on the frozen surface of *#!%

Sorry about the long comment but I've been meaning to write you and thank you soooo much for sharing and tell you we personally think this is BRILLIANT (did I mention that?)

That's excellent Jennifer!! I hope the technique makes you some money....and eliminates a lot of frustration.

JAN

2010

Hi Bryant,

Great post with good photo. Keep post. Best of luck.

Best -Sash

SEP

2010

Hi Bryant,

Great post, I went to real estate investors workshop and their was an instructor that talked about submitting multiple offers to locate the properties that want to sell to him, he used this shot gun method to locate the sellers of REO that want to sell to him. He automated the process of filling out his offers with a software program that filled each offer with a custom cover letter. In just a few minutes he could send out by fax, or email number of offers. The program he showed us was very interesting. He could even upload signatures to the offers, so he did not have to sign all of them. He works with an exclusive agent and he uploaded his signature, with the state required forms he needs. Since he trying to find deals he said that his agent likes the fact that he does not have to manually create these offers for him.

SEP

2010

I am not a LA or a buyers agent.. I am just somebody who is trying to buy his first house.....I have read all your comments and after submitting many offers at list, above list,below list... I can see that the game will go on so only deep pockets will be able to obtain a home....The homes in my price range are being gobbled by Investors with unlimited funds that can out bid us in a snap...

JUN

They say all is fair in war and I must admit working with some of the banks on their REO's is more of a war than just a battle these days. They waste our time all the time, so if structured correctly, I don't think I would mind returning the favor at. :)

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Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc

Poinciana, FL

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Bryant Tutas-Tutas Towne Realty, Inc

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