Those who have been paying close attention to how the houses for sale in Metrowest of Boston have been performing may have observed the results of the dreaded “multiple offer situation.” When a closing price seems to rise unexpectedly, it could be because of something called the “Best and Final.”
That notice can be issued by a listing agent on behalf of the Seller as soon as more than one offer is on the table. Experienced real estate agents sometimes choose this strategy to win the best price for their client. It instructs all interested buyers to submit their “best and final offer” by a deadline (usually within 24 hours). Since no counters or escalation clauses are allowed, one blogger has aptly called it Multiple Offer Sudden Death. Here’s how it works:
· The seller’s asking price is listed at, say, $320,000.
· Buyer A is interested; bids $310,000.
· After a few rounds of negotiation, the seller and Buyer A near agreement at $316,000,
· Buyer B, not knowing that the seller is nearing agreement with Buyer A, submits her bid.
· The seller initiates Notice of Best and Final, giving both parties 1 day to submit their offer.
· Buyer A begrudgingly goes up to the full list price: now offers $320,000.
· Buyer B shoots all the way up to $329,000 – the offer which is accepted.
In this scenario, Buyer B not only paid $13,000 more than Buyer A was about to pay, but also paid $8,000 more than needed to beat Buyer A’s top price.
Great news for the seller, for sure — but less exciting for the buyers, since what was a great deal just becomes so-so. That’s why I advise my buyer clients to do their best to remain emotionally detached. I suggest deciding on the true value you believe the home is worth, then sticking to it, no matter what!
What you don’t want to do is let emotions make the offer and either bid more than you really want to and regret it afterwards, wanting to cancel the sale, or underbid and wish you had gone higher.
This is where a good Realtor can help counsel and advise you with both information and wisdom.
When you are buying a home or selling a home start by working with a seasoned real estate professional who will keep your best interests at heart! I have helped home buyers and sellers for over 25 years. I’ll be there for you throughout the entire process! I can also refer you to reputable mortgage lenders, home inspectors and contractors.
Don’t forget, you can stay on top of Metro West real estate with my FREE monthly newsletter and market updates!
The Market Insider report is also free and packed with useful information.
When you have questions about real estate, contact me first! I will provide the latest sales data and the market experience you can trust!
John Savignano
Hopkinton, MA Real Estate Expert
RE/MAX Executive Realty
Comments(0)