If you are picky about what you’re going to buy, and will only offer on quality properties that are priced attractively, then you need to have an effective bidding-war strategy.
Practice on this one!
Leave your guess on what the sales price will be in the comment section. The closest guesser will receive dinner for two at the oceanfront Marine Room down the street!
Here is the link to our previous full tour of the property.
830,000 is my WAG. 😀
909K (there’s a minimum size limit on the comment?)
$892,000 will take it.
$891,000 is what I’m guessing. This was the corner where I had my first car crash at 16. I had just gotten my driver’s license and took my Dad’s car to go look at homes in La Jolla.
Well, I took that turn too fast, ended up crossing the double yellow and into a Toyota Tundra.
The car? Totaled. My Dad? Happy that I wasn’t injured….but not pleased. At all…I got one big lecture after that incident.
959,000 nice kitchen
$888,001. If I win, Jim, I’ll give you the name of my friend (who lives in La Jolla).
“How do you win a bidding war with 17 other offers in?” – JtR
Oh, that’s easy! First call JtR to represent you. With Jim’s 25+ years of experience + negotiating expertise, the other 17 will be left in the dust. (Just ask shadash).
$902,500…all cash…30 day close.
So is this Price of Right rules? If so I bid $1
$ 853,000 If it rents to college students, will it be worth more or less when it resells?
$845k going low
855k should do it. No view, busy street.
$917k – its a big lot in La Jolla. They ain’t making more of those
With 18 offers, how does a buyer differentiate themselves!?! Based on my recent understanding it doesn’t seem like the highest number is what will win or is the strategy likely to win.
– Is cash best, and will only cash offers win (or be the finalists)?
– Will a large down payment make a difference (and will that help with contingencies)?
– Will a no-contingent offer make a difference?
– Proof to the seller you will be able to get the loan?
– Will this go to a builder/developer (and will dual agency help)?
– etc.
Or a combination! How does the buyer get to the right ‘combination’? What combinations are important and what combinations do sellers like to see? What combination do you think will ultimately win in this example/instance since with such a large pool, there will be many combo’s?
Am I wrong that there is far more depth than just a number (especially with 18 offers)!?!
(my number is 857K in the spirit of the contest)
P.S. Enjoyed the broadcast! Thank you. I think you said there were 11K listeners!?! Serious or JtR humor?
My guess is $860,000
$865 000.00 cash
$789.000.00 all cash.
My guess is $856,000
Thanks big perm, and yes, examining the different variables is part of this exercise.
There are many angles, but let’s start with seller ID.
This is a bank deal. In my experience, the asset managers don’t get so enamored with cash deals if there is a financed deal that is much higher. With long-time owners or estate sales where there are boatloads of equity, the decision-maker might think a cash deal sounds sexier, and leave money on the table. But not the banks – if they can get at least 5% more on a financed deal.
If there is an appraisal issue, it is a different story. If the house is busted up or has bad comps around it, everyone takes a quick cash deal.
Next stop: Listing agent.
You need to check their sales history to know who you are dealing with.
REO listing agents typically don’t mess around, because they are loyal to their seller no matter what. They will play it straight even if they have their own buyer, because they would never want to jeopardize their gravy train with the bank. So don’t think that going direct to the listing agent will clinch it – the highest and best offer will win.
More later.
I would say $805,0000
$901,400
(hard to believe it sold for $1.2M in 2005)
911,000.00……………
Typical strategy on the commercial side in a bidding war is 1) bid too high and get the seller excited as we know they are all greedy; 2) make it all cash; 3) re-trade them down to market price at the end.
We’ve lost out to people many times who end up trading the price down to our original offer price. Its frustrating as we were honest/legitimate in our original offer and the winning party just BS’d their way….but it appeals to the seller’s greed.
Thus, winning offer will be $1,050,000+ and it will close for:
$960k
Hmm… I’ll take a WAG at 925,000.
$925,000, but someone snagged that one. I’ll outbid him to $936,000 cash, 15 day escrow.
$900k on the dot!
$929,000.
Clearfund and Jtr: Are buyers allowed to submit a very high offer to entice the buyer and then negotiate/work their way down to a more realistic price in order to be the winning bidder? It doesn’t seem ethical to me and if I were a seller, I wouldn’t appreciate someone tying up my property like that.
$858,000 all cash
$849,000 14 days escrow all cash
$810,000 based on comp on Bremerton. But, will buyers get caught up in the frenzy of the bidding war and pay more?
$915,000
Id do some research to see who else is there…
$819,000, 30 day close, waive inspection.
$775, cash, no contingencies, 10 day close
912K.
It’s a good size lot in LaJo and you can walk to campus.
Agree with collegejoe – that street is nasty out there and it is crazy with drivers and cyclists.
$840K…waiving the inspection is key
Are buyers allowed to submit a very high offer to entice the buyer and then negotiate/work their way down to a more realistic price in order to be the winning bidder?
Not usually, but it doesn’t stop buyers from trying. I have seen counters come back from banks that specifically state that they will not re-negotiate the deal later, so if you don’t like what you find during inspections, your only recourse is to cancel.
When you see known bidding-war escrows cancel and come back on the market, that is the usual cause.
Buyers who get caught up the the excitement end up cooling off in a hurry, and the agents need to be good to navigate that – it happens on most every deal.
$790k is my guess…
Can you trust the listing agent?
Those that are open and honest about all details are trustworthy – they are doing their best for the seller.
The listing agents who you can’t get on the phone, won’t return calls, or get cagey, vague, and evasive if you do speak with them – those are the ones that will stab you in the back.
It’s unfortunate because these types of agents are screwing their own client – think of what they will do to you.
Take your best shot and hope.
Tom Tarrant was tempted to go straight to the listing agent on the Bay Park deal – he knows his way around a transaction, and used to be a licensee.
But once we talked, he agreed he would have a better shot with me representing him.
Why?
Because I am an experienced veteran of bidding wars, and you saw my last scorecard: 17-2.
Not only do I utilize tricks of the trade, but I also stress that the listing agent check the sales history of each buyer’s agent to ensure that they can close a deal. It is quite a trump card.
There were cash offers higher than Tom’s, yet we won.
All cash, $955k.
The average rate for a 30-year fixed-rate mortgage during the week ending Jan. 12 slid two more basis points to 3.89% with an average of 0.7 of a point. A year ago, this rate averaged 4.71%.
$837500 is my guess
SP – $849,000.
1. have an experienced buyer’s agent that answers their phone / email promptly and can succinctly convey the strength of the offer and their buyer’s qualifications and motivation. Buyer’s agent should find out what the seller (bank) specifically requires regarding purchase contracts and documention prior to submitting and include those terms / items – communication and professionalism is vital.
2. have cash, or complete loan approval (pending only on the buyer’s choice of a property) with a minimum 30% down from a very trustworthy source. Have that lender contact the listing agent offering to be available to answer questions and provide any follow up documentation the seller (bank) desires that was not previously provided 3. is the buyer able to purchase the property if it appraises lower than the contract price? If so, provide proof of that and take out the appraisal contingency. Write in the bank’s preferred title and escrow servicers
4. offer to complete inspections in 3 – 5 days
5. minimize any costs to the seller (bank) where feasible (do not ask for a home warranty!) and state in the contract that the buyers will NOT be asking the seller to pay for any repairs – they truly are taking the property “as is”
6. submit, pray, and follow up.
$979k cash & a smile!
Funny on how many people are willing to contribute and add to the blog when free food is offered. 🙂
$853K
$835,000 cash, no inspection, 15 day escrow.
1 million, might as well guess higher than everyone else!
$937,000 will get this deal closed!!
$878,000! Foreign buyer for sure.
How ’bout 1,075000?
$774,000. More than 20% down.
$799,000 all cash.
$862,000 sell price
$843,000. Cash or no loan contingency. Builder or contractor buys and waives inspection.
$985,000. The rental unit will bring in $1000 itself and the lot has room to expand.
The rental unit will bring in $1000 itself and the lot has room to expand. $985,000 wins it.
Jim, listing agents that won’t return your call is my #1 complaint. And poor communications is the #1 complaint of customers about their agents. I have noticed that if a property has been on the market a long time and especially if it has fallen out of escrow that the listing agent has simply become frustrated and just wants the property to go away. The deal will be a PITA for the buyer’s agent in that case, but you might get a great deal for your buyer. Might. There’s a reason it fell out of escrow.
$880k, All Cash, 30 day escrow. Inspection is the only contingency.
$850,500 cash
The potential extra unit is gold.
$865,000. Convenient location, Nice lot, extra unit, decent finishes. downside: road noise, curb appeal not great. Overall, sharp list price.
$899. Great location, some traffic noise
$943 sell price
$905,000 It would have to be cash as I can’t see it appraising for that price. Not really worth it but to someone connected to UCSD that REALLY wants it…maybe. Foreign buyer perhaps.
My guess is $999k …..
My strategy is to add a couple zeros to the end of the address, 9477, so my bid is $947,700.