A reader named ‘interested_buyer’ sent this in:
jim, i’m not interested in the lavendar property, but i was interested in how long/how many bids you were going to take before you recommended to your client that they should take a particular offer. if you don’t want to spill the beans, you can talk about it more generally on what strategy you recommend to your selling clients.
like for instance, you get 2 offers in the first day, you might recommend to your client to keep the house on the market for at least 7 days to see what rolls in. i’m on the buying side and interested in the thinking behind the selling side. thanks!
Great question – and people should ask more questions of their realtors!
In today’s internet-savvy environment, all the hot buyers will know about a new listing in their target area within 24 hours – if not 24 minutes! Unless the property is hard to show, the motivated buyers will get over there within a day or two, and make their offer. Boom, the fourth day is peak urgency.
The hottest buyers move quick because they are in Stage Three – they are done waiting for more downdraft, they are tired of looking, and just want to buy a house.
Lavender was a good example – I inputted it on Tuesday, thinking that by Friday we’d have some action and hopefully sell it. Sure enough, an offer came in the first day….but because the bank didn’t move fast enough and had Monday off, the first buyer has bailed out.
I don’t want to lose the first buyer – they have the highest motivation. But banks do what they do.
Another offer came in today, so we are still at four, but it was lower than the rest. Today is Day 8, and the urgency is oozing out the door, and down the street. We have requested that all submit their highest-and-best offer (the only fair way to handle it), and we’ll see tomorrow if the bank feels like selling it.
Ideally I’d like to input a hot, non-bank listing on Thursday morning, conduct open house over the weekend, and sell it Sunday night, the end of Day Four.
Sellers HATE this strategy, because they want to believe that this is like every other job where you put in 2-3 months of hard work and then magically a buyer shows up. But since the internet has evolved, it is a different ballgame – one of hyper-instant gratification. The 3-month strategy would only work in an appreciating market.
I made a comment a few posts back about bubbleinfo readers who use other agents. You should read their blog, and rely on their advice – it is likely to be different than what you see here.
The most common strategy today is for agents to throw a new listing onto the MLS, usually without photos, and then say – NO SHOWINGS FOR 1-2 WEEKS. I don’t know why anyone thinks this is a good idea – buyers forget all about you, or if they do remember to come back next week, they will have cooled off substantially and offer less. But I see this on most new listings these days.
Most agents are zombies, and just do what everyone else does. Ask questions so you know what you are getting!
Today, I asked Mary what her strategy will be when handling her new listing in Derby Hill:
http://www.sdlookup.com/MLS-120009742-10792_Heather_Ridge_Dr_San_Diego_CA_92130
She is planning to do open house both days this weekend, so I asked her, “If I gave you a full-price offer today, would you accept it?” She didn’t commit to an answer, but it sounded like it was at least a maybe. The list price is higher than what they paid in 2008, and my guess was that she will have five offers.
Jim, That is first rate advice. I have been in my car at 7:30 am on a friday, on my way to see a place that came on the market at 12:01 that morning when I got a call from an out of state client about the same listing. We closed 10 days later. There’s an app for that. List thursday, hold it open saturday and sunday and if the price is right you will be in escrow by tuesday. It’s a different world.
Love the Glengarry-Glen-Ross reference!
“The world needs plenty of Bah-tendas!!!”
I digress….here is my two wooden nickels on the subject:
The Mrs and I are first time buyers and we have made only ONE offer (short sale) since starting our search in earnest early last year. That’s it, one offer. Why? Because we know exactly where we want to buy and we know exactly what we want. The house we offered on listed on a Monday with an open house scheduled for the following weekend. We toured it on Saturday and put the offer in on Sunday. Boom! Done….now we are waiting to hear from the bank. In the meantime, there is still nothing on the market that is
A) in our price range
B) in our target area
C) meets our criteria.
There are a few homes available that we sort of like, but they are inferior to our current, outstanding offer.
Therefore, I concur with Jim’s “4th Day Peak Urgency” claim. Right now, it is like a Mexican standoff between banks, delusional sellers, and well informed buyers. Because the internet has made the dissemination of information so easily attainable buyers are simply bored and are not amused by cheap realtor gimmicks or flaky banks. If the list price is right, then there are enough QAULIFIED buyers to get things moving. How deep is that buyers pool? Well, that is anyone’s guess at this point.
“The most common strategy today is for agents to throw a new listing onto the MLS, usually without photos, and then say – NO SHOWINGS FOR 1-2 WEEKS”
That has to be the most asinine strategy I have ever heard of. What in the world do they hope to gain form this? Is it somehow easier for them? Does the intrigue somehow excite buyers? I know when I was looking it was “no showings, no photos, no interest”.
About open houses, it’s said that they accomplish little more than give the realtor an opportunity to get his business cards into the hands of active buyers? Benefit to the sellers? Not so much. True? If true, it seems sellers are not aware of this.
http://realestate.msn.com/article.aspx?cp-documentid=13108451
http://www.realtor.com/basics/sell/listadvert/openhouse.asp
It depends on the realtor. Most are inexperienced salespeople, and don’t know the first thing about how to sell the house off an open house.
They are MORE effective now, during the internet era, because buyers have access to the listing data. When they see one they like, they will drive by – and if you are having it open, come inside and buy it.
The media takes advantage of lazy realtors, and prints stories like this to make them look bad.