Are offers on the first day more likely to walk away?
As a realtor who believes that the first offer is usually the highest and best offer for the seller, I am starting the question my logic.
AND as the inventory of available homes starts to drop, we are finding more multiple offer situations starting to happen on the first day. Normally we stall and make a selection on day three for the buyer that seems to be the strongest. Recently, I have noticed that many of these "first place" buyers are backing out, based on the inspection.
Noticeably, this happened twice to me today. Two listings that were under contract after being listed and receiving multiple offers, were rescinded today after inspection with no explanation. In Washington state, our contracts allow buyer to back out of an offer based on the inspection with no explanation what-so ever.
This causes me ask if these buyers were writing offer on properties with no intentions of buying at all... Maybe they wrote on multiple properties with the intention of choosing the best one after inspection? Maybe they found something better after they wrote the offer? Maybe they were hedging their bets and just writing on the top two or three homes that met their criteria? AND then choosing the best one / deal?
So I ask you this: are these "phantom" offers artificially increasing the selling point of the market? If these buyers are bidding against real buyers, (who really love that particular home) then are they forcing the prices up? I believe that, if phantom buyers are writing escalation clause offers to win bids that they don't intend to buy, then they are artificially driving prices higher than the market would support. A home that is listed at $340,000 that sells for $352,000 because of one (or more) of these buyers are involved would cause the seller to believe that the higher price is the true worth of their home. Even when it falls through, the seller would want that high offer to sell again... and there might be more of these buyers in place that would make that happen.
Are any agents in other areas experiencing something similar?