Can someone justify this?

Question

I want to hear from other agents how you as the listing agent would handle this? I know that the offer has been accepted, so we definitely can't change that. I'm just more interested on the mindset of the situation.

There was a listing that went live around 1pm today. We knew it was going to go fast, so clients and I went to go see it this afternoon and were working on getting in an offer. The listing agent had it pending on the MLS by 6:45. I know it's a good area, price and all that jazz but wouldn't it be in the best interest of the seller to leave the listing live for more than 6 hours before accepting an offer? The MLS notifications go out at 8am every morning, so anyone with daily updates hasn't even received the listing yet.

So my question is, would you accept an offer on a super hot listing within a few hours or would you give it a little more time and/or do a multiple offer notification?

Mike Cumbie · Answer

Hi @Cassi Justiz

Just 2 weeks ago I put a house on the MLS at 10:00PM. My phone was ringing off the hook when it came out of do not disturb at 8:00 AM. I had an agent who said they had an offer they wanted to present at 10:30AM. I met at the house they presented. It was over asking, no inspection, non refundable EMD and the first time the buyer would see is at final walk through (I did make the agent walk through). I did have over 30 showing declines to go through and had several unhappy agents/prospective buyers.

I could have tried to get something better, but we had pushed the market, my clients did not have to allow 30 groups trampling through the house with their new baby, they were happy, it was about as high as it was going to appraise. Sometimes the best offer is the most aggressive one that comes in the fastest. Turns out they had lost 4 houses and our good faith gesture of locking it up quick has made a smooth transaction for my clients and them.

Mindy Jensen · Answer

As the listing agent, I would have recommended to my client that they wait at least a day to see if there were other offers.

I do call the listing agent when I'm representing the buyer once they've made the decision to make an offer. I ask if there is an existing offer on the property, and let them know we're sitting down to write one up as well.

In my very hot market, there is a listing that came up (IMO) ridiculously over priced (I was thinking it was a $450 house and it listed at $695 - I'm not that far off in my thinking) but also already under contract. I can't wait to see what that closes at...

Brian D. Beatty · Answer

If their client wanted it, maybe it was not worth losing? As a buyers agent, the minute my buyer says "let's make an offer", I text and email the listing agent to inform them we are coming with an offer in 24 Hours. You will typically stop the seller from accepting any offer, until they have seen yours. Never tell the agent what you are coming with. My experience, still may not have made a difference.

Brian Beatty

Brent Shields · Answer

One time I really wanted a house so I called the listing agent and said, I will offer you more than your listing price and I will use you for my buyers agent so you can have both ends of the commission, but you need to get the seller on the phone and have them accept my offer right now.

I really didn't want anyone else making an offer.

And it worked, it was off the market very quickly.

Mike Roy · Answer

@Cassi Justiz - It's possible that the listing agent already had a buyer before the listing went live and is representing both parties.  6% of $200k is $12k, but 3% of $250k is just $7,500.  From the agent's point of view, you might as well take whatever makes the seller happy if you can bring a buyer to the table and earn 6% on it.

I'm not sure if the agent still had a legal obligation to list on the MLS, or maybe it's just good marketing.

Irene Nash · Answer

It will be interesting to see what the final 'sold' price is when it closes. Based on the information provided here, it seems likely the seller could have gotten more than list price for it.

A helpful question for sellers is "If someone paid you $10K to tour your home at a time when it caused you a moderate inconvenience, would you say 'yes' or 'no'?

(I'm not talking about 2 a.m., I mean helping the seller realistically evaluate what allowing a little more market time would mean to them - often it's far more than $10K, and usually their expectations are set for days of showings anyway).

Allowing the market to set the price by giving the home at least a day or two on the market (more depending on the listing strategy, i.e. when there's an offer review date 3 to 6 days is usually better, but I understand that's not appropriate for all markets) is what allows the market to do what it does best, set the price.

If the seller decides to not do that it's just important for them to truly understand what that may mean to them so it's an informed decision.  I work primarily with non-investor sellers and I can't think of one who hasn't been willing to go through some inconvenience for a higher sales price.

The extra $10K  (or $5K, or $50K) that the seller gets if the price escalates often translates to a big percentage of their net, i.e. if the house sells for $400K instead of $375K - so just under 7% higher - and the seller pays $250K in mortgage payoff and selling expense, the seller actually walks away with 20% more cash.

To be clear, I don't recommend toying with buyers and alienating a good offer needlessly by dragging things out - some times that first offer is the best one, or it may come in significantly higher than list price. But if it's not and other agents are beating the door down trying to show the house that tells you a lot about what might happen price-wise.

Jay Hinrichs · Answer

on super hot listings on the West coast my wife will put them on   say on a Tuesday and just say all offers are due and will be reviewed on Sunday at 12pm..

Frank Wong · Answer

Listing agent represents the seller and if the seller is happy that is all that matters.  Sometimes the first offer is the best offer.  Like @Mike Cumbie said you might not even be able to beat it and have 30 people running through the house.  The non-contingent cash offer is hard to beat.  Unless you doing the same you probably not getting the house anyways.  Sometimes it just wasn't meant to be.

Cassi Justiz · Answer

@Mike Cumbie

Thank you so much for the response. That definitely sheds some insight.

The listings I usually do are for investors who are only looking at moving fast and for the most $$ as possible. So I have to remind myself that retail sellers don't particularly want people trekking through their homes. So that makes sense. If they got a higher than market offer and only had 2 or 3 people in their house, that could definitely influence them to accept the first offer.

The house was priced high for the neighborhood but low for the market, so there is a good chance that the first offer was similar to what you are describing.

Cassi Justiz · Answer

Those are both great points.

Thank you!

Can someone justify this?

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