Are offers on the first day more likely to walk away?

By
Real Estate Agent with Realty One Group Cascadia

 

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 Two listings that were under contract after being listed and receiving multiple offers, were rescinded today after inspection with no explanation.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?

 

Posted by

Mark Hall

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Comments (5)

Bruce Hicks
Best Homes Hawaii - Honolulu, HI
Your Best Hawaii Realtor!

I just had that exact thing happen twice.  One listing the agent and buyer wanted to set a showing before the Sunday Open house and gave the offer at open house.  Mark Hall offer was accepted and by Monday evening they cancelled.

May 07, 2015 04:25 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Mark - We are seeing multiple offers, but I haven't noticed first day buyers being more likely to walk away,

May 07, 2015 04:35 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Mark, What I don't like a seller to accept offers on homes that a buyer hasn't seen, especially if there are multiple offers.

May 07, 2015 04:36 PM
Jill Murty, Realtor - Orange County, CA
Sunset Properties, Powered by Movoto - Laguna Niguel, CA

Mark Hall - I haven't seen what you've experienced.  I'm surprised people are canceling after the home inspection.  If they're determined to cancel, I'd think they'd do it before they pay for an inspection.

May 07, 2015 05:10 PM
James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Good morning Mark not so much around here.  Most of the offers after being accepted go to the closing table.  You may be right in your assessment however.

May 07, 2015 08:31 PM