MULTIPLE-BID INSANITY - It's Back, But Only at the Bottom of the Ladder. And Only the Well-Heeled Need Participate!

What about the NSP program? Any luck getting offers accepted with the 4 contingencies in the purchase contract?

Here in Northern Colorado, I have been told a few times this summer not to bring an FHA offer because the property needs too many repairs.  I have also had offers, in which the buyer is obtaining financing, beat out by investor cash, as-is offers, even though our financed offers are higher. 

The buyers are hearing and reading about how bad the market is, but then getting beat out on multiple offers.  Some of them have a hard time understanding, or accepting this unusual situation, so I find it is a good discussion to have with them at the beginning of the process. 

These buyers seem to become more motivated to act on a property they like after having been beat out on a few, or after planning showings for two days out, and having the property go under contract before they get around to seeing it.

Same behavior here in NoVA and especially at the <250K price point.  With some buyers I'm having to write 10+ offers before we get to a winner.  Cash waiving appraisal is an obvious choice for the seller, but I can't see how FHA/VA/Conventional at 20% above list is going to appraise for a half-eaten home.

Endless stream of offer-writing aside, another strategy I employ is looking for the moderately "overpriced" listing I can fit into my buyer's budget.  I also nudge some clients and their LO's to see if there is any wiggle room to increase the ceiling (e.g. gifts, undisclosed income or assets) or decrease closing costs with grant funds (some former Countrywide LO's have this available to them).

If it means taking advantage of these crazy-low interest rates, prices and/or making the tax credit deadline or losing out, you have to pull out all the stops.

HI Dean,

In the metro Milwaukee, WI market we see the same sort of thing. I do not necessarily think this is a bad thing however. Did your buyers really have $10,000+ extra for after closing, to put in a furnace, water heater, new toilets, and all new appliances?

Yes, the best deals go to those who have been conservative and saved their money. What is wrong with that?

I do agree however with your comment about the REO listing companies. There is nothing more frustrating than dealing with them!! Don't really see that changing however, due to the volume they handle. Just the price you pay to get an incredible deal, I guess.

As many have said in their comments, educating the buyers as to this crazy market is key!

Same here, I had a 20% down buyer bid $40k over list and lose.  I'm assuming a cash buyer beat them out.  I was floored.  They were so upset I don't know if they will try again.

Tni

This is happen in the Arizona market a lot priced at 75K sold at $120. They are trying the negotiation game, when it will not appraise, they hope to negotiate the price with the bank. Fannie has started telling them to go to Homepath for the where appraisal is not required. On my last property, I had nine bids and I just went down the list, number three was serious

We are seeing multiple offers on the lower priced homes. Missouri has a NSP program for foreclosures but it is difficult to get the REO's to consider this type of loan, FHA or VA.

Buyers find it difficult to believe that they have to offer over list price on these properties. They have heard on the news that we are in a "buyers market" and think they can submit low ball offers on the bank owned properties. What they forget is at list price, the house is already substantially under valued.

Purchasing a foreclosure is a frustrating process for the first time homebuyers to go through and it not for everyone.

Thanks Dean, yes. there are some great bargains for those with the will and MONEY to get it done.

It is happening in my market as well.# times in the last week it has happened to me personaly on 3 different properties. I just sent in an offer on yet another one just minutes ago, I hope it comes through and yes my client overbid. I did however get an accepted contract last week for a HUD foreclosure, and we overbid on that one also.We were the second highest bidder and the highest bidder ended up not getting it. Was probaly the fact that if you overbid on a Hud foreclosure you must bring to the table the amount of the overbid, if the home goes FHA. Agents who dont deal with HUD foreclosures probaly didnt know that.

The only time I got an FHA offer accepted on a foreclosure (8 bids at the time - a few months back) - was because she was originally approved conventional.  However, during the process, PMI rejected her because they upped their FICO minimums.  Because her attorney stayed on top of things with the bank's attorney, they allowed the switch to FHA, extended the closing time and it closed!  I did not expect it to so that was one good surprise this year.

Yup ... VA and FHA buyers have been having a tough time here for over a year now.

Nothing that fantasic happening here on Maui.  Too much demand and still not enough inventory in the "affordable" category.  There are some good deals that get snapped up though.

I am seeing the same thing.  I have my buyers put in offers on multiple properties at the same time in hopes of getting one.  The problem then of course is getting it to appraise.

Well, if this keeps up the number of houses on market will be reduced. That is of course a good thing. The market for housing is starting to stablize. Then we can go back to showing and selling non-distressed housing. Boy, I can dream.   

Here in Columbus, Ohio, any decent bank owned or HUD owned property will go above asking price. Sometimes substantially above asking price. On REOs I have seen best & Highest solicitiations after the first weekend a property was listed. Missed out on some, but also nailed a few for my clients, too.

Just do your homework and know what the current fair market of the home you are considering really is. Many agents price purposely low to get the bidding frenzy going and in the end the bank wins by getting higher offers.

We have been dealing with this in Denver, CO for six months to a year.

How about the old 'gold standard' we used to use:  $1000 higher / $500 higher than the highest bid price.  Kind of sneeky but it works.

I've been having the same experience. My lower end clients with minimum down payments and FHA loans are getting beat out left and right by investors and cash buyers.  Apparently listing agents of "regular" sales have decided to jump on the bank wagon and underprice their listings as well. Even in the $1 million+ category we're having this situation. A home listed for $1,065,000 comped about $100K more than that. My clients came in around $1,150,000 and were countered at $1,270,000- more than $200K above asking. There were 9 offers. Those clients did not get the house. Now we're in counter offers on a similarly underpriced home with 19 offers!  Who said we're in a buyers' market?!