Multiple Offers Have Become Commonplace! Buyers: Plan Your Strategy!

By
Real Estate Agent with Red Oak Realty

Since mid-March of this year multiple offers have become a common occurrence in this part of the San Francisco Bay Area's East Bay's real estate market. In most of Berkeley, Albany, Rockridge and other desirable neighborhoods, offers from two to 24 have been received on properties. Some of these offers have been astonishing--not just in the amount offered, but in the strength of the terms. So here is my number one tip for buyers to keep in mind when faced with competition, starting with context:

Multiple offers are an economic reaction to low supply and high demand. Rather than being discouraged by competition, gather key information and plan your strategy.

Begin with a careful analysis of value, not price. All list prices are not created equal! Some agents are known for pricing below market value to encourage multiple offers. Banks in our area often price their holdings at absurdly low prices relative to market value, and then receive offers in double digit numberes. With low inventory, there may be few comparable properties making it especially tricky to know is true market value. So the most important question becomes: What is the property worth to you? Does it have value to you not easily reflected in the price per square foot number? How would you feel if you lost it over a small percentage of your offer price?

Keeping close tabs on what's happening in your hyper-local area is crucial. How many similar properties have appeared recently? How did they behave? Sometimes multiple offers will still result in a sales price close to the list price. In our Berkeley area real estate market, we're now seeing over-bidding by 100s of thousands of dollars again, and in percentage terms, some over 30% above list price. Buyers need to have an agent with their finger on the pulse of their specific target neighborhoods to derive at a true assessment of *value*!

For more tips for buyers in multiple offer situations, check out my blog post at GreenBungalows.info

Posted by

Arlene Baxter, CRS, Green

Red Oak Realty -- "Seriously Local"

Berkeley Office, 1891 Solano Avenue

Cell: 510.717.1799  GreenBungalows.info   DRE#01209552

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Rainmaker
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Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Arlene, I am thrilled for Sellers and the real estate community!  The news coming out of California continues to sound promising.

Jun 07, 2012 03:23 AM #1
Rainer
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Greg Freeman
Citiwide Real Estate Services - Allen, TX

Good to hear news of multiple offers. Its not so common here in my market anymore but it does seem that things are starting to pick up.

Jul 11, 2012 02:04 AM #2
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Arlene Baxter

Listing/Buying agent, Historic to Green, 2012 REALTOR of the Year, Berkeley Association Berkeley CA & environs
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