Unhinged.

By
Real Estate Agent with Jameson Sotheby's International Realty

I used to tell my buyers and sellers that an offer, any offer, within 10% of the listed price was an offer worth talking to.  Note, I did not say worth accepting, but worth opening a dialogue.

In today's market, that has changed.

I showed a property to clients recently, and they like the home.  It's listed right around $500,000, and the buyers wondered out-loud whether it made any sense to put an offer together around $450,000, and then they looked at me with raised-eyebrows, waiting for my input.

Ordinarily this is where I'd roll out my hackneyed: "Any offer within 10% is worth talking to.  Don't expect them to roll out the red carpet, but we'll know a great deal about their motivation with their first counter."

In today's market, however, I don't think that applies.  I know that we had to shoe-horn ourselves in, because they had showings scheduled all day.  Properties in this price range, in good condition, are rare in my marketplace.  So the liklihood that we would find ourselves in multiple offers is strong.

It's very possible, coming in 10% below list price, that we won't get a counter at all.  In fact it's very possible we might not be included in the call for highest and best.  So my counsel, today, is that unless we're prepared to bring in a very clean offer, full-price (or higher)... we might just as well move on to the next property.

Today's market has become unhinged.

Posted by

 ALAN MAY, Realtor®   
Specializing in Evanston Real Estate and North Shore Real Estate

Jameson Sotheby's International Realty, 2934 Central Street, Evanston, IL 60201
Office: 847.869.7300      Cell: 847.924.3313      Email: Almay@aol.com

Evanston Real Estate & North Shore Real Estate
Licensed in Illinois

   

Comments (10)

Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Alan,

It seems everyone on Active Rain is echoing your observations.  A lot has become unhinged these days.  Happy Sunday.  A

Apr 11, 2021 07:47 AM
Alan May

It's a truly weird market, Alexandra.  I recently lost offer number eleven with a client of mine.  We made a strong offer, and were beat out.  We were one out of 38 offers.

Apr 11, 2021 07:49 AM
Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

While my local market is totally whacked and we're not having to do the "guess how high above list price it'll take to win game (much)", my engineering rationale is about pointless when it comes to pricing and what comps would indicate.  Sellers can push the top end of the historical sales and get it, so the real question to buyers is now "are you willing to lose the home if you don't offer full price?". 

Apr 11, 2021 11:47 AM
Alan May

yep... disregard the comps... "here" is what it will likely cost to win the bid.

Apr 11, 2021 04:12 PM
Mark Don McInnes, Sandpoint
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

I have to have a long discussion with buyers addressing this issue.  There seems to be no right or wrong answer that covers all scenarios.  Very frustrating for buyers.  Mark

Apr 11, 2021 02:50 PM
Alan May

there's definitely no right answer...  it's a crap shoot.

Apr 11, 2021 04:13 PM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Alan- it has to be difficult for a buyer, even a seasoned one, who is not used to this crazy market. Where/when does it end!!!???

Apr 11, 2021 04:07 PM
Alan May

oh... it will end one day... and it won't be pleasant.

Apr 11, 2021 04:13 PM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

It is unhinged all over the country and with some propertie 10% over may not be even close

Apr 11, 2021 07:32 PM
Alan May

I'm seeing the same in my region.

Apr 14, 2021 04:19 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Alan, I tell my sellers if someone took the trouble of submitting an offer with Proof of Funds and Pre-Approval and 18 pages of an offer we should give the courtesy of a one page counter offer... but that is just me... lot of Jackasses lost the skill of courtesy and respect... I submitted an offer $70+k over asking and did not get the courtesy... oh well I will remember that listing agent... as long as I am in the business. Endre

Apr 12, 2021 09:52 PM
Alan May

Common courtesy isn't that common, anymore.

Apr 14, 2021 04:20 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Alan 

Here a home priced at $500,000 full price - forget about it. 

Apr 14, 2021 12:11 PM
Alan May

I'm not sure if you're saying that's high, or that's low.

Apr 14, 2021 02:08 PM
Anna Banana Kruchten CRS, CRB, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

These days most buyers have figured out that it's absolutely imperative to put their highest and best offer in upfront or forget about even having a chance to win a bid. Markets change but I don't think this hot one is going away anytime soon.

Apr 14, 2021 04:12 PM
Alan May

it's been going 'hot' for a while.. hasn't it?

Apr 16, 2021 05:50 PM
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Yup.  Unhinged.  But some buyers still need to experience it first hand and then they get the message.

Apr 14, 2021 04:19 PM
Alan May

yep... sometimes buyers need to be beat-up by the market first.

Apr 16, 2021 05:50 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Yep, here too. A home went on the market for $400K and there is no way it was worth that.. in the market of the day before. Multiple offers flooded in, it was under contract in a day, and sold for more than asking. Buyers are having a tough time finding anything they can afford.

Apr 19, 2021 05:52 AM

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