Monthly Archives: February 2012

Multiple Offers More Common Than You Think

 

Multiple buyers fighting over the same home is not uncommon.

Although not the norm, it is not unusual in today’s market to see buyers fighting over the same home. This is termed a “multiple offer” situation, or “multiples” in real estate agent lingo. Regardless what the media says about it being a buyers market, bidding wars do happen and seem to be taking place more frequently.

By definition, “multiples” occurs when more than one buyer is attempting to purchase the same home at the same time. This happens not only on homes that are new to the market, but also to homes that have been sitting for a long time. I’ve personally seen homes listed for over a year that ended up having multiple bidders.

The important point of this article is that a multiple offer situation can happen at any time and will present additional challenges. Regardless if you are a buyer or seller, these transactions can be much more stressful.  On the buy side, not only do you have to negotiate with the seller, but you also have another buyer to worry about.  Strategy is extremely important in this situation and one wrong move could lose you the home of your dreams.

As a seller, while most dream of having multiple bidders for their home, it isn’t as great as it seems. Buyers are often put out at being in a competitive bidding situation and if you don’t play things right, you risk alienating all of your buyers and could end up with none.

The winning party sometimes ends up having buyers remorse,  feeling they were pressured to pay more than they wanted. Some end up backing out during the inspection period because of this. Additionally, the losing party ends up very resentful of the process. They are often so angry that they rarely come back in the event that the home comes back on the market.

The fact is, in a multiple offer situation, someone losses and it creates a lot of ill will. Whether justified or not, emotions will run higher than normal here. That is why we like to avoid them when representing our buyer clients.

We tell our buyers that if they like a particular home, odds are high that some other buyers will feel the same way about it.  So, don’t hesitate to make an offer quickly or risk either losing the home or having to get into a bidding war to get it.

When it comes to multiples, understand that they do exist in all price points and could happen at any time. Remember, nice homes that are priced well don’t last very long in any market. Unfortunately,  we tell our clients this but sometimes they end up learning the hard way.

 

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About The Authors

The above information is compliments of The Schuman Team, Amy and Dan, of Howard Hanna Real Estate Services.

They can be reached at 216-346-3235 or 216-403-9189 or via email, danschuman@howardhanna.com or amyschuman@howardhanna.com.

The Schumans service the following Cleveland area suburbs: Bainbridge, Bay Village, Beachwood, Bentleyville, Chagrin Falls, Cleveland Heights, Gates Mills, Highland Heights, Hunting Valley, Lakewood, Lyndhurst, Mayfield Heights, Mayfield Village, Moreland Hills, Oakwood Village, Orange, Pepper Pike, Shaker Heights, Solon, South Euclid, University Heights, Westlake, Woodmere.

Multiple Offers More Common Than You Think is the property of The Schuman Team and may not be duplicated or used without their written consent.

The Inspection Process And Why It’s So Stressful

The home inspection process will make or break a transaction. It is by far the most important  step for both buyers and sellers. The following post will explain the process and offer some advice to make it easier for you.

The home inspection processHere are some basics about inspections. They are done to protect the buyer by informing them about the condition of the home and to uncover any defects. A thorough inspector will also take the time to educate the buyer about the home and how to properly care for it. We highly recommend a home inspection to anyone buying a home.

Historically, inspections were meant to put heavy focus on uncovering very specific things relating to structural defects or health and safety issues. These include things like mold in an attic, radon gas, or large cracks in a basement wall. Sellers typically offered to address these items as standard protocol.  It was a more simple process in the past.

Today, buyers seem to be asking for everything under the sun, even things they were aware of when they walked through the home ( broken outlet cover, rip in screen door, etc..). Now, the inspection typically results in round 2 of negotiations.

Usually, it is not what comes on the report that causes problems, but how the buyer deals with the information. Some buyers are more alarmist than others. Which brings us to our next point: emotions are at an all-time high during this phase of the process.

The inspection period occurs when buyers’ emotions are at a heightened state.  Buyers are initially very exited about their new home. After a few days pass however, additional feelings creep in such as nervousness, anxiety, and sometimes even buyer’s remorse ( did we pay too much, is this really the right house…). These are natural and every buyer feels them, some just handle the emotional aspect better than others.

Buyers can become more emotional and less rational when dealing with items that appear on an inspection report. The sellers in turn become defensive upon seeing a laundry list of petty items. It then becomes a long drawn out process, often worse than the original negotiations.

THE SOLUTION

We communicate to our buyers to offer a price based upon what they see when they walk through the home and what has been disclosed by the seller. If you are aware that there is a cracked window, or a broken screen door, either address it up front or factor it into the price.  If you know the roof is 24 years old, factor a new one into the price. Don’t wait until it shows up on the inspection report and then use it as a way to re-negotiate a better price. This is a little disingenuous to the negotiation process.

When it comes to addressing inspection issues, try to focus on health and safety issues or structural defects that were not previously disclosed.

Also, we believe it is best to respond to the seller as quickly as possible. Although the standard contract will typically give you a certain number of days to respond to the seller ( in Ohio it is 3 days ), waiting until the last minute and dragging the process out may do more harm than good. If you really want the sellers to do something, making them wait on pins and needles for three days is not the best way to get their cooperation.

The inspection process has become the most important phase of the buying and selling process. What happens here will often determine whether or not a transaction  ends up closing. Remaining calm and focusing on the big picture will often get you through it. That, and of course the help of a good agent.

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About The Authors

The above information is compliments of The Schuman Team, Amy and Dan, of Howard Hanna Real Estate Services.

They can be reached at 216-346-3235 or 216-403-9189 or via email, danschuman@howardhanna.com or amyschuman@howardhanna.com.

The Schumans service the following Cleveland area suburbs: Bainbridge, Bay Village, Beachwood, Bentleyville, Chagrin Falls, Cleveland Heights, Gates Mills, Highland Heights, Hunting Valley, Lakewood, Lyndhurst, Mayfield Heights, Mayfield Village, Moreland Hills, Oakwood Village, Orange, Pepper Pike, Shaker Heights, Solon, South Euclid, University Heights, Westlake, Woodmere.

The Inspection Process And Why It’s So Stressful is the property of The Schuman Team and may not be duplicated or used without their written consent. ©February,2012