When Buyers Pay OVER the Asking Price...

Good morning Sally. You shared a lot of common sense and wise advice for anyone in this kind of situation.

Have seen a number of appraisal issues when there is a bidding war on property.

Hi Sally and David.  This is excellent advice that hopefully will be read and understood by sellers in this enviable position.

There is definitely a happy medium of buyer requests and seller agreements that can make a deal work out for everyone. If the sellers are getting more than they expected in terms of money, and the buyers have some reasonable repair requests, I would suggest the sellers go ahead and make the fixes. Everyone wins.

This issue of "thinventory" is definitely causing many agents and buyers and sellers to rethink the entire negotiationg, inspection, and appraisal process. I recently suggested to my clients that they withdraw an offer for a townhome that had gone into multiple offers and where the seller selected our offer, but got a little too full of herself in her demands. This week we found another townhome, paid $5K over ask and got the house against 7 other offers. But at least the seller was realistic on terms... we gave in on her need for a slightly extended closing date; she provided a good allowance towards a home warranty. It's all still give and take even in a hot market.

Great post Sally & David! I know the biggest problem we see with this situation is the appraisal doesn't keep up with the demand and there are a lot of hurt feelings when this happens; the seller because the buyers can't pay the extra out of pocket and the buyers because even though the "won" the bidding war they lose the house in the end. I look forward to reading more of your insightful posts in the future!

I like these words.. Seller , respect the offer.  I think, regardless of amount this should always be the case.

Hi Sally Offers above listing price is only better than cash IF they can get it appraised.

Good Morning Sally excellent post. Sellers should respect the offer if its highest and best and know it might not happen again.

You offer sound advise in a strong market for sellers.  Our market is so slow that sellers appreciate any offer and are usually most obliging to work with the buyer

It's a shame when buyers and sellers are so commited to their particular agends, rather than trying to be a bit more objective and think about the long-term goal they both want - the house to change title. How about some common sense and objectivity?

Any reasonable contingency should be considered, however, it's ultimately the sellers decision to draw the line so their agent can proceed to close. When a property has L3 and in a very desirable neighborhood, closing will occur rather quickly. The price will be determined by the amenities and value of the property, so, buyers will pay more to secure their lifestyle.

Sally we've been seeing a lot of game playing over the inspection requests this past few years. Far too many bogus items asked for (how do we know, we have homes pre-inspected) and the list of items asked for is ridiculous. If the seller knows their home well, and it's been pre-inspected and items repaired that puts them in a better negotiating position. I just wrote a long post about it last week. I could write one every week as it is seriously the biggest complaint our legal hot line has been getting 2 + years in a row.

"Respectful" and "realistic" - qualities that would serve the transaction well if ALL parties possessed them. 

Hi Sally and David - looking at the transaction in a rational business way is certainly great advice.

It's a sellers market here and in some areas, multiple offers and sales going $5000-$15000 over an asking price of $250K!!  It's very difficult to be a buyer in a market like that.  We also see a lot of flipped deals  as buyers get cold feet a few days later.  The inspections are important though and both parties need to work out a reasonable compromise.

It's almost like passive aggressive in nature and I always have found it kind of weird.

It's a sellers market in a lot of places more than a buyers market. I'm not surprised. Good luck! Mary Hutchison, SRES, ABR

Although we are all excited to see the home appreciation happening finally we as Real Estate Agents should be mindful of the run up in perceived value before the market crash in 2008.  Overly optimistic buyers could find themselves doing a short sale in a few years. The business cycles of prosperity and downturn have occurred several times in history.

Sally & David, great post on offers that are over the list price. I like your point that after Home Inspection and request to repair have been made the Seller may not view the offer as so good.

We are called upon to be professional at all times and this may be the time to shine and help all parties concerned come to a reasonable agreement.

Definitely a lot of common sense in this - I always tell my sellers that if the buyer bleeds in making the offer, they are going to come at you during the inspection - life is a circle!