Home Buying in Boston>Question Details

sk28, Home Buyer in Boston, MA

Other offer accepted

Asked by sk28, Boston, MA Tue Mar 26, 2013

We saw a house on Sunday and put in our offer that afternoon for $1k higher than asking price. Its a beautiful house and we expected multiple offers based on open house traffic. Anyways, the seller accepted another offer without even asking us for our best and final (which we expected and even hinted in our offer email). Frankly, it is difficult to judge how much over the asking price we should go. I am willing to go over by another $15k but seller's agent is not telling us anything. My agent has tried asking her for all the info. Do I have any option? As you can tell, I am not able to let this go

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Territory.com’s answer
No options. There are no rules/regulations that govern the multi bid process so how much information is disclosed to each buyer/buyer's agent is completely up to the listing agent and seller discretion. We have been through 25+ multi bids in the last few weeks and all have gone in the first round. In this competitive market always put your best number (and terms) forward in your initial offer expecting you won't have the option to negotiate. It is not worth losing the property you want for a lower number when you were prepared to pay more.

Good luck!

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0 votes Thank Flag Link Sun Apr 7, 2013
This is very common in the Boston market right now. There are many reasons that the other offer could have been accepted so it's hard to say why they didn't come back to you.

Honestly, because the Boston market is so crazy right now you probably don't have much of a chance at this property. As much as you like it please try to remember that another one will come along that you love.

The buyers who are having success in this market are doing the following:
- putting there best offer forward first
- being flexible on the closing date
- being flexible on the inspection contingency
- getting preapproved well in advance of an offer AND having a strong preapproval letter from a mortgage lender or bank that the seller and seller's agent trust.

Please feel free to contact me if you would like any help with your preapproval. We also can talk to the seller agent for you to tell them how great a buyer you are.

- Jarred
617-456-1700 ext 115
2 votes Thank Flag Link Wed Mar 27, 2013
Good Afternoon
Not all agents ask for a best and final offer. You went in over asking, but only 1,000.. I have seen multiple bid situations end in 25 to 30,000 over asking or more. That would be a case where a broker would not need to do best and final. Of course this all depends on the property many are underpriced to begin with purposely in order to create a frenzy of offers...
Just make sure you have an experienced agent...They should have a good sense of how a property is priced and be able to advise accordingly.
Good luck next time! I am sorry you are so disappointed!
Robin Hanley
0 votes Thank Flag Link Sat Mar 30, 2013
Make a backup offer and hope for the best. Because of the high demand the sellers are in a very good position to accept or reject and the seller is not obligated to give you any more information which can be very frustrating.

Good luck
0 votes Thank Flag Link Wed Mar 27, 2013
This is very common in this market. Inventory is on the slim side and the amount of buyer demand is ultra high.

The seller has the right to make a decision on which offer they want to work with and which they would like to accept. Sometimes there is no logic to this and sometimes it boils down to more things than money. Offers are comprised of many facets.

1.) Price
2.) Financing
2.) Contingencies
3.) Paperwork (meaning is it complete, in order and legible)
4.) Timeline

There is not much you can do if an offer is already accepted besides make a formal backup offer and stay in constant contact with the seller's agent.
0 votes Thank Flag Link Wed Mar 27, 2013
Even though you really want this unit, the offer has been accepted and unless it falls apart there is nothing that can be done. Best option is to be a back up offer.

Best of luck.
0 votes Thank Flag Link Wed Mar 27, 2013
There have been some really good answers to your question already, so I won't repeat the advice.

What I will say is that I've experienced this with clients many times in the past and, more often than not, they end up buying a home they like as much, or more. It may take some time, because inventory is low, but sooner or later it'll work out.

Very often in a rising market newly listed homes already have an out of date asking price. It's important to have your agent review pending sales and time on market, and find out as best they can how many offers were made on comparable properties recently. If 15 offers were made on a similar house a week ago, chances are 14 of those people would make an offer on the next one. This means that the list price is probably too low relative to recent pending sales.

It's hard to completely ignore the list price but, increasingly, it's something that must be done if you want to make an offer that has a chance of being accepted. Do be careful, though, to only offer what you can comfortably afford to pay. It's no use being the winning offer if you end up house poor and regretful of your decision.

Good luck in your search!
0 votes Thank Flag Link Wed Mar 27, 2013
The buying process can be quite tiresome since there are many things that can contribute
to your offer being passed on.
The current market allows owners to take action as they see fit.
With the housing inventory being low, sellers can take actions that they
have not done in the past.
Speed of the process, buyers sometimes including skipping inspections, and offers well over asking can be some of the more annoying.
Be careful not to get trapped in a situation where a seller or their broker starts lower than the value in an attempt to create bidding war.
0 votes Thank Flag Link Wed Mar 27, 2013
I always advise buyers that there are no rules as to how sellers must respond to offers. My advice usually is to put your best foot forward with your first bid because there's no guarantee that you'll get a chance to better your offer. You might want to reserve a few thousand dollars from your very top number so you can increase it if given the opportunity.

The market is very heated right now. Many properties - and NOT properties "priced low" are getting multiple offers. It's not uncommon *at all* for there to be 10 or 20 offers or more. It's very challenging for buyers and buyer agents. Prices are going up right now well beyond what prior sales data suggests.

A few things to consider - you may lose a few more, you might want to look a bit lower in the price range so you have room to pay more, talk to your agent about escalation clauses, be prepared to go for it when you find the place you really, really want.

Good luck! It's stressful but you'll get there.
0 votes Thank Flag Link Tue Mar 26, 2013
The sellers are not obligated to counter an offer. If they get an offer they are afraid to jeopardize they can just accept that one and reject the others. The seller's agent will typically play their cards close to their chest and not disclose too much information in case the deal falls through. Knowing what a seller accepted can effect a future negotiation. You are finding yourself in a familiar situation that was prevalent several years and in some communities around Boston has not changed. Multiple offers going over asking. It's a tough call regarding what to offer. You have to respect your comfort zone and understand your limits.
0 votes Thank Flag Link Tue Mar 26, 2013
We live and learn. It is difficult when we do not get what we want...next time make your best offer and save yourself the heart ache! If there is a signed offer then then your only option is to put in a back-up offer if they will accept one. Even IF they will accept a back-up offer it is a LONG SHOT that offer will ever come into play. Good luck in your home search!
0 votes Thank Flag Link Tue Mar 26, 2013
First, if you anticipated multiple offers, why did you only offer $1,000 more than the asking price? Next time, figure out initially what the house is really worth. Then make an offer closer to that figure.

Second, why didn't your agent suggest an escalation clause--a clause that would have automatically raised your offer up to that $15,000 level, based on offers from other people? Next time, consider including an escalation clause.

Third, why did your agent allow you to believe that the seller would ask you for a "best and final"? Next time, assume that there won't be that opportunity.

Fourth, the listing agent is under no obligation to reveal any details of the successful offer.

Fifth, your only option is to try to put in a backup offer. If the initial offer falls through, then you might have a chance.

Hope that helps.
0 votes Thank Flag Link Tue Mar 26, 2013
Thanks for your response. The issue with listing house at a lower price is to not know what is seller's expectation. Should I put in $20k higher than list price on my first offer? In a way you are competing against yourself as there is no ceiling. The house in the areas were sold lower than my offer. Frankly, if there is so much interest, I would go back to a group of people (I think I would have been part of that) to beat the higher offer (and get even better offer from the highest). I expected this, so did my agent. I will look into escalation clause.
Flag Tue Mar 26, 2013
Don Tepper, Real Estate Pro in Fairfax, VA
Sellers do not always come back for a best and final if the first round provides everything they are looking for. We are experiencing a sellers market in many areas, and often offers are coming in over asking price with amazing terms. Money might not have been the only factor in your offer not being at the top of the list - maybe the other offer was cash (no lender involvement) or maybe they could close sooner or did not ask for various inspections/items. Your broker should be able to ask about these items as they compared to your offer and/or express to the other agent you may be interested in keeping your offer in a back up if you cannot let go. If the current deal falls through, you would then be next in line. I do not always suggest this to clients, but in your case where this will be the one that got away it might be something to discuss. Keep in mind, if you are seeking to secure a loan through the bank for this home you and the seller are not the only ones who need to agree on price - the appraisal needs to come in at that price as well. I've seen some instances where buyers want a property so bad that they are excessively overbidding and the market comps haven't caught up to their desire yet. I doubt $15k would be a serious overbid but just be careful on your next offer. Best of luck.
0 votes Thank Flag Link Tue Mar 26, 2013
With multiple offers going with your best offer should have been your priority, If the listing agent is ignoring you it is becuase they have taken another offer and proceeding with that., you can place your best offer and submit and see what they then say or yes, will have to move on
0 votes Thank Flag Link Tue Mar 26, 2013
Please let go, and find another unit and let your broker clearly state to the seller broker that you want the unit.
However, if you do this, you may be taken for a ride.
Your situation sounds like an example of when some brokers put units on the market for a lesser $$ than the market requires and then have buyers outbid each other.
You are better off staying away from such deals.
Kind regards,
0 votes Thank Flag Link Tue Mar 26, 2013
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