Home Buying in Valencia>Question Details

Flochas, Home Buyer in Valencia, CA

Can i find out if a property we are bidding on really has multiple bidders?

Asked by Flochas, Valencia, CA Sat Feb 5, 2011

I feel like we are getting the run around since the property has been on the market for 7 months now, and we are being asked by our agent to offer over $10K above asking price. It is an REO.

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Answers

14
Many factors to consider here.:

1. Was there a recent price reduction?
Chances are the property sat on the market and had trickle down price adjustments until the right one got buyers excited. Keep in mind most bank asset managers don't live in Califonia and price the home wrong. It could take months for the listing agent to get the bank to be more realistic about price.

2. How quick does the bank respond to offers?
Sometimes it takes weeks to get a response from the bank to decide which offer they want. Perhaps buyers came and went tired of waiting for an answer. It's possible at all times they have had multiple offers.

3. Did they recently make improvements to the property?
Sometimes a home will sit on the market in bad condition, definitely not in move in condition. The bank will finally make the decision to fix the house up to generate buyers.

Remember you are always the one in charge of offering want you want on a house. It's important your agent runs the comps for the neighborhood. I would not pay over market for a home in todays market. But just because you offer $10K over list doesn't mean it couldn't be $20K under market. You will be getting an appraisal that will determine the value.

I always tell my clients that you need to offer what you feel comfortable paying for the home so that if someone offers a $1 more you are fine with letting them have it with no regrets.
1 vote Thank Flag Link Sat Feb 19, 2011
Hi Flochas,

I work in the Valencia area as a Mortgage Advisor, so my answer is going to be from a lending viewpoint. Chances are I may know your realtor too. I say don't concern yourself with whether or not there are multiple offers on the property. If that is indeed the case, you only need to decide how much you are willing to offer AND at that offer price are you comfortable with your monthly payment, etc.

If you really want the home and want to offer more, there are financing strategies that actually allow you to pay more but have the same or even a lower monthly payment. I know that sounds strange but it's true and it's actually no more risky than a plain vanilla 30 Year fixed rate loan.

I would caution you not to focus too much on paying exactly the 'right' price. Interest rates are moving generally higher these days so it could actually COST you more if you wait. I don't know what price range you are looking, but I can tell you just a .25% increase in interest rate on your loan will easily wipe out a $10k difference in price savings. You're paying that higher interest rate for the life of the loan, whereas you only pay the higher price for the home once.

Lastly, and it's no secret, but any offer you make MUST be supported by comparable sales in the area and finally an appraisal. So you could offer $20K over the asking price, but if it doesn't appraise you're stuck paying the difference or you get to move on to the next home.

Please feel free to contact me with questions. I love working with buyers and helping them find financially sound solutions to their financing needs.

Dennis Kotzman
Certified Mortgage Planning Specialist
661-755-0954
Web Reference: http://www.funderman.com
1 vote Thank Flag Link Fri Feb 11, 2011
To my knowledge there is No way to validate the actual # of Bids or the actual Bid amounts. Yes, if there are actually multiple offers, then the listing agent would be abreast of this info... But, there is no way to make them share this info. and this info should be confidential and unethical to share contractual specific info. unless the seller authorizes written disclosure of the highest bid or Lowest acceptable offer.

But, proving this #??? Jeanne, has agreat idea with writing an escalation clause. But, anything that dirties up the offer or complicates an offer also runs the risk of getting rejected. That is why the bank wants your "Best and Highest" offer and the Bank will then determine which offer makes the most since for them... The "Best" offer isn't always the "Highest" offer...

Good Luck and KNOW your Local market and you'll have No regrets!
1 vote Thank Flag Link Sat Feb 5, 2011
What you need to have your agent REALLY analyze is, what the price reductions been like over the past 7 mos? Was there just recently a Massive price reduction? Maybe this new price reduction was pretty big & there actually are multiple bidders now. It's tough to predict being on the outside.

If you are purchasing in Valencia, I assure you I am far from that location & do not have any buyers I'm working with in that area, if you'd like an outside opinion, feel free to shoot me an email with the address & I'll check into the price reduction history for you.

If you don't want to do that, just have your agent REALLY analyze the comps, is it still a great deal at $10K over the current list price?

EmilyKnell1@yahoo.com
562-430-3053 cell
Realtor Since 1996
1 vote Thank Flag Link Sat Feb 5, 2011
How much is the home worth to you? It's it worth to go $10k over asking price? It's a question you have to answer for yourself. Don't think there aren't any other great deals out there. The home you are bidding on or want to bid on is not the only one available and if it doesn't work out then maybe it wasn't meant to be.
0 votes Thank Flag Link Sat Feb 19, 2011
Hi there, a tool that is useful to navigate a possible multiple offer scenario is an escalation clause which is included as an addendum to your offer. It establishes how far you will escalate your offer and under what terms. You would have base offer, and increase the offer if there is a bona fide (ie in writing) offer that equals or exceeds yours, you will beat that offer by a certain increment up to a specified ceiling.

It begs the question, how will you know if there really is another "bona fide" offer - in order for the escalation to be triggered it must be proven. It is unlikely that the offer will be shared with you, but it could be shared with your attorney.

I've had this work well in competitive bidding situations - but I've never used it with an REO. Talk to your agent about it and see if she thinks it has merit.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sat Feb 5, 2011
Check out homes that have sold in 90 days or less in that housing tract. Were they REO'S, Short Sales, Standard Sale??? Ask questions.
0 votes Thank Flag Link Sat Feb 5, 2011
Hello,
There are many homes currently that have multiple offers, especially if they are priced well or in highly desirable condition. You really need to rely on your Realtor to get you the answer and hopefully your are working with some who has earned your confidence. If the listing agent does not tell your Realtor the truth, there really is not much that your agent can do. Of course if there is misrepresentation, etc. it could be taken further, such as a grievance with our Board of Realtors filed by your agent, etc. Even then there is no guarantee you will find out the actualy situation.
Best of luck!
0 votes Thank Flag Link Sat Feb 5, 2011
It is strange to have so many at the same time, but it does happen. Thing is, the listing agent should present your agent with multiple offer form. Thing is, regardless of how many other offers there may or may not be, it still needs to fit your needs. After that, have your agent compare the comps, and then I would (if it were me and my potential home) put in my very best offer. If you get it, great and if not, then you did all you could and move on with that piece of mind.

Best of luck.
0 votes Thank Flag Link Sat Feb 5, 2011
The listing agent should have that answer, and your agent should be able to get that info. for you. Basically, since the listing agent is the one who receives the offers, only him/her and or their staff would know for sure how many offers have been received. So, it boils down to trusting the listing agent.

Multiple offers often create bidding wars. Nevertheless, what's really inportant is not how much one bids over the asking price, but how the price you offer as well as the property condition, upgrades, etc. compare with other recent similar sales in the area.

Sincerely,
Henry Best - Broker/REALTOR
Cash 4 Buyers Realty
0 votes Thank Flag Link Sat Feb 5, 2011
What is it worth to you?

Its not totally abnormal, but it could be.



Richard Schulman
0 votes Thank Flag Link Sat Feb 5, 2011
Property could have multi offers and bank choice to determine IN THEIR OWN TIME which offer they may accept Also recommend for you keep looking Just because you submitted a sales offer bank may not even respond


Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Sat Feb 5, 2011
Hello Flochas,

Bank owned/REOs are getting multiple offers in this market. Most REOs in Santa Clarita are priced at 10-12% below market value. If you really want a good chance at purchasing the home, you might need to offer more than their asking price.

Has your agent shared the true comps with you? Do you know exactly how much (price per sq. ft.) other similar homes have sold for within the past 3 months? These are answers that your agent should be providing you.

Many banks are simply asking buyers to submit their "highest and best" offers. They are not interested in negotiating back-and-forth, but they will simply choose the best offer for them.

Best of luck!
0 votes Thank Flag Link Sat Feb 5, 2011
The listing agent is the only one with that information which would be communicated to your agent. If you put in an offer on the property and your agent a Counter Offer in response, the Counter Offer must indicate whether or not it's a multiple offer Counter Offer. Your agent should give you a copy of the Counter Offer. If it's a multiple offer Counter Offer this could be the reason your agent might be suggesting that your offer exceed the current list price. Sometimes a property has been on the market for sometime and a price reduction occurs and suddently there's more competetion for the home. This could also be another explanation for the recommendation of your agent. Best of luck in your negotiation.
0 votes Thank Flag Link Sat Feb 5, 2011
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