Max Vigliotti went to the South Boston open house armed with four pre-approvals. Depending on how the competition looked, the agent who likes to conduct “smooth real estate transactions” would match the appropriate pre-approval with his buyer’s offer, hopefully not letting on that the buyer might possibly be qualified to pay more for the home. A couple of the pre-approvals allowed his buyer to make an offer in excess of the listing price. What the full-time agent and Southie resident didn’t figure was that the bidding would get so crazy for the condo, taat the final price would go beyond any of the preapprovals. Apparently, in this new real estate world, an agent might need to bring five pre-approvals to the open house.
Leslie Mann, who has nearly a decade of experience working with clients on the acquisition and sales of luxury homes, tells a similar story. She brought clients to an $825,000 listing in Belmont. There were 12 offers on the property, and eventually the home closed at $918,000. Asking price, schmashking price. The market always determines the price and in this new market, agents have to prepare their buyers for the fact that the home they like may go $100,000 over the asking price or – almost unfathomably – even more.
David Sampson, a Boston-based agent who has 22 years of professional experiences, recently brought a client to a multimillion dollar Beacon Hill investment property. It wasn’t long before he heard that there were 42 offers on the property. You read that right: 42 offers! It’s a new real estate world for agents and you might be wondering, when there are 42 offers on the table, how much over asking does the agent have to advise the buyer to go in order to win? Although this property hasn’t closed, rumors are it will garner at least 50 percent above the asking price.
I might be waxing nostalgic, but I remember way back when, maybe about a year ago, when if even one buyer showed up who was willing to pay a price acceptable to the seller, it was an incredibly happy occasion. In those happy days, buyers would leisurely stroll over to the arranged showing and comfortably write an offer with their agent that, frankly, left a little room to negotiate. That form of brokering real estate had only been the predominant form for maybe as long as anybody can remember. Today, however, that marketing pace feels like it moved at the speed of dial-up Internet. Today, the best homes hit the market with all the fanfare of a visiting Teen Idol. They have jam-packed open houses and buyers throw offers in like their requests for autographs, which in a way they are.
Unprecedented?
Can there be any doubt that multiple offers are occurring at an unprecedented rate in the Hub? Ryan Persac, a veteran agent who prefers working with buyers versus sellers, told me out of 30 offers he has written this year, only one was not a multiple offer situation.
Asked what percentage of her transactions were multiple offer situations, Shari Goldin, an agent who is known for being carefully researched and having an analytical approach to brokering, says, “Thinking back over the past few months, even the past year, I would have to say that 100 percent of them were multiple offer situations, including listings and working with buyers.”
“Most surprising was a listing in Melrose that had been in the market for 694 days (only 153 days with me),” she said. “There had been no offers and no activity, and then all of a sudden there was extensive interest, three offers, with three other parties standing in the background ready to present offers.”
On the agent side, it takes a certain grittiness to win in today’s multiple offer situations. Agents get buyers to go to their maximum price, they tighten inspection timelines and financing contingency dates. But in today’s market, even if it’s not a multiple-offer situation, it may take the same type of determination to secure the home.
One situation I’m familiar with involves buyers who had recently lost out on nine- and 16-offer situations. They saw a pristine home that had only been on the market a few hours, and when they heard that the seller was reviewing offers as they came in, they immediately offered 103 percent of the asking price. The seller countered at 105 percent. You read that right: the seller countered his lone offer from highly qualified buyers with an even higher price than the stated asking price of his MLS listed home. Not only that, but the seller countered with terms that were just short of requesting a pound of flesh and the buyers’ first male offspring. Yet, fearing that other buyers would soon find out of the home’s availability and create even more of a bidding war, the buyers accepted the new price and terms.
I guess, in this market, it makes no difference how many offers are on the table, or how much over the asking price buyers have to go. If it’s short of an indecent proposal, there’s an agent out there working with buyers who are willing to do what it takes to win.
David Bates is a broker with Gibson/Southeby’s International Realty and author of The Bates Real Estate Blog, www.BatesRealEstateReport.com.
