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

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

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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Topic:
Home Buying
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Florida Osceola County Kissimmee
Groups:
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Tags:
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Rainer
1,731
Pamela Frey-Primiani
Keller Williams Realty - Cherry Hill, NJ

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.   

Jun 26, 2009 07:56 AM #171
Rainer
3,376
Tristan Celayeta
Bradley Real Estate - Mill Valley, CA

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.

 

Jun 26, 2009 08:32 AM #172
Rainer
57,693
Tatyana Sturm
Exit Realty DTC - Aurora, CO
Denver Realtor, GRI, Denver/ Aurora CO Relocation

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,

Jun 26, 2009 09:12 AM #173
Rainer
147,744
Monique Ting
INET Realty Honolulu, HI - Honolulu, HI
Your agent under the sun

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 26, 2009 02:44 PM #174
Rainer
18,532
Alicia Ramirez
Chicago, IL

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 27, 2009 07:45 AM #175
Ambassador
2,078,549
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

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

Jun 28, 2009 02:46 AM #176
Anonymous
Bonnie

BB,

 

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

Jun 28, 2009 06:06 AM #177
Rainmaker
33,644
Susan Zanzonico
Berkshire Hathaway Home Services - Morristown, NJ
Sellers/Buyers Agent, Morristown NJ Real Estate

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 28, 2009 07:18 AM #178
Ambassador
3,641,966
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

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.

Jun 29, 2009 01:47 AM #179
Rainmaker
1,141,150
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

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

Jun 29, 2009 08:50 AM #180
Rainer
137,413
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

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.

R

Jul 03, 2009 11:14 PM #181
Rainer
31,575
Linda Breeding
Keller Williams Realty - Pinehurst, NC

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 06, 2009 01:54 PM #182
Rainmaker
199,440
Mark Velasco
Sharpstone Realty, Inc - Whittier, CA
Listing Agent-Whittier & Surrounding ciities

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.

Jul 07, 2009 06:52 PM #183
Anonymous
Jennifer Keltner

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?)

 

Aug 22, 2009 07:54 AM #184
Rainmaker
1,141,150
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

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

Aug 22, 2009 09:49 AM #185
Rainer
154,195
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Bryant,

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

 

Best -Sash

Jan 03, 2010 04:13 AM #186
Rainmaker
34,781
Mark Corbett
The Buyer's Choice - Providence, RI

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 08, 2010 05:36 PM #187
Anonymous
Demetre Hajenian

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... 

Sep 23, 2010 05:51 PM #188
Anonymous
Demetre Hajenian

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... 

Sep 23, 2010 05:51 PM #189
Rainmaker
294,255
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

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.  :)

Jun 05, 2011 04:12 AM #190
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