Making Offer on 1st Day of Listing

[Daniel H.]

Any advice for making an offer on the first day of MLS listing? I usually make offers on properties that have been sitting a while. If one comes on at what I think is a good price, should I offer slightly less than asking price and make offer good for one day only?

Obviously I will appear too eager if I am bidding on first day.

Also I don't have time to see property before making my offer but I would be happy to pay that price if inspection checks out.

[J Scott]

We listed three properties for sale the other day. We actually didn't even list them -- we just emailed them to the cash investors we know (or their agents). Within 48 hours, we had over 25 offers on the properties. Not a single one of the buyers had seen a single one of the properties -- in fact, most of the buyers were in California and would never see the property.

On two of the properties, the highest offers totaled $206K (one buyer). Then we had one guy who offered $188K for both. We accepted his offer, which ultimately reduced our net by about $18K. Why did we do that? Because he mentioned that he had seen one of the properties a few months ago when it was in foreclosure (made an offer but didn't get it) and he was willing to cut his contingencies to 1 day of due diligence and nothing else.

The buyer who offered $206K had LOTS of contingencies and stipulations, including 10 days due diligence, appraisal, proof that the subdivisions would allow the houses to be rented, we had to provide clean termite letters, we had to have utilities on for inspections, etc. This was their best offer...they wouldn't budge the contingencies/stipulations. While there was a reasonable chance that they'd ultimately move forward with the deal (they're a big hedge fund from CA), we just didn't feel like doing all the extra work and dealing with all the hassles. In fact, due diligence for these offers wouldn't have ended until next Sunday...the offers we accepted will be closed before that.

So, the moral of the story is, if you're going to put in an offer on a property on day one and it seems like there will be a lot of competition, make sure your offer is as clean as possible. While some sellers may solely be looking for the best price, there will be some like me who are happy to leave some cash on the table in order to get a quick and easy sale. It also helps if you've seen the property (sellers don't want to deal with people backing out because they're putting in lots of offers unseen) and if you put up a lot of earnest money.