When there are multiple offers on one of my listings, I am happy to divulge the pertinent information to all parties – because transparency benefits the seller. But most listing agents act like they are guarding Fort Knox, and won’t give any guidance on what it will take to win.
What do you do?
I ask these questions of the listing agent:
1. “How many offers are there?” To warm them up, start with an easy math question.
2. “How will you handle? Will you request highest-and-best from each buyer, or just take the highest offer?” In almost every case the agent hasn’t given it a thought, and is caught off-guard. All that matters is how they feel about highest-and-best, and gauge whether they might just sign an offer.
3. “Have you, or anyone in your office, written an offer?” I have won a bidding war when the listing agent wrote an offer with their own buyer, but it takes guile and guts to pull it off. But first, you need to know if that is the case. P.S. If they hesitate, the answer is yes.
Secondly, rank the property. Is it in the 95+ percentile of homes you have seen? If so, big-cash and/or desperation could turn this bidding war into a freak show. Determine an offer price that makes you uncomfortable, and then add some mustard.
If it is a nice home, but has some warts – then use this as a guide:
Desperation isn’t exactly an ideal state of mind for conducting business transactions.
Remember when I was the king of winning bidding wars a couple of years back?
Now I lose 2-3 per month, and that’s more than I win.
I don’t know what to call it – desperation, hysteria, insanity – but something comes over the other buyers to pay absurd prices that have no relation to the comps.
I’m going to stick to my guns and give advice to my buyers based on reality. If we lose to crazy people, then so be it. When the music stops, me and my clients won’t be left without a chair.