Home Buying in Palm Springs>Question Details

Vicki, Home Buyer in Palm Springs, CA

Multiple offers? Educate me, please. In Edmonton's hot market, that means multiple offers on the same house

Asked by Vicki, Palm Springs, CA Sat Feb 9, 2008

by several buyers!
As a buyer I can make offers on several condos, let them all know I've done so, and hope to conclude the buying process faster, as a result?
Cool! But don't I risk having more than one seller bite, and end up committed to buying more than one condo? And what about deposits with purchase offers?

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Answers

12
Hi Vicki,
Here in San Francisco we still experience multiple offers on homes. What I recommend to my buyers is to put their best foot forward with their first offer, and I help craft an offer that fits my buyers' situation while being as competitive as possible.
I'm with Elvis in that I'd also say focus on one property at a time.
(Palm Springs is great; watch out for the wind in the North part of town though!)
1 vote Thank Flag Link Sun Feb 10, 2008
You and Elvis bring up a good point with Earnest Money (EM). In a multiple offers situation, strong EM and few or no contingencies will likely win the bid even if the dollar amount isn't the highest. If you offer to buy at asking price for cash (no loan contingency), depending on the rules of your state and the wording of the contract, if there is nothing to be negotiated you might not be able to refuse delivery. Here in IL we use attorneys in most real estate transactions and one of our contingencies would be a 5 day attorney review period. This would be an "out" if you had more than one offer accepted. I wouldn't risk the situation unless you had two outs such as refusing delivery and loan contingency (assuming you can't afford to buy two condos).

What I would suggest is concentrating on one at a time and putting a 5 pm deadline on your offer. If its not accepted by 5pm, you submit your next offer for another condo with a midnight deadline. Then the next offer submitted has a 3 pm deadline and so on. This way, as Mikem says, you are making the seller bid for the buyer. If none of them are accepted during the deadline period, you can start over by extending the deadline if the sellers have not already accepted another offer. I would also suggest having your agent present your offer in person.

Good luck,
Ruth
1 vote Thank Flag Link Sun Feb 10, 2008
Ruthless, Other/Just Looking in 60558
MVP'08
1st, let's understand that I am NOT recommending making offers on multiple properties. I think you're better off concentrating on one at a time. But, to answer your question directly... I don't think you run the risk of committing to buy more than one.

An offer can be "withdrawn" at any time, and once you've accepted one... you can simply "withdraw" all other offers by phone, fax, or e-mail (or all three)... and if for some reason you have been unable to reach the other offers to "withdraw" you could simply refuse delivery... because in order to be considered an accepted "contract" it must be signed & "DELIVERED", and if you refuse deliver (even if they walk into your office, contract in hand and walk up to you to hand it to you, you can simply say, sorry the offer is withdrawn, we're refusing delivery.

Regarding initial earnest money given with the offer.... here in northern illinois, our typicaly i.e.m. is $1,000.00 and what I usually do is provide a "photocopy" only, of the check with the offer, because the check is not cashed until the offer is accepted. Therefore once we have the fully accepted offer in hand, then we turn over the real check. This way you don't have a check to chase after if the offer doesn't work.

Now, again, I'm not recommending it, 'cause it's fraught with difficulties, and as the sellers and seller's agents it totally stinks, and plays with peoples emotions.

Mike's suggestion of an checking with an attorney is a good one, since your local rules may be different than ours... and I like the idea of the "contingency" telling the story upfront, because that seems so much more honest and fair.
1 vote Thank Flag Link Sun Feb 10, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Thanks so much. I thought it sounded too good to be true. I'll proceed very cautiously
1 vote Thank Flag Link Sat Feb 9, 2008
Check with a local realtor or better yet an attorney before you do that. It's a great idea in theory (make the sellers bid for a buyer) However after asking my broker it appears that you'd be liable to buy all the properties that accept yoru offer.

Try to see if you can include a contingency in your offer that basically says that you sent offers to 5 different properties, and the first one to get back to you with a written acceptance will get the deal. But according to my broker that contingency won't fly. So talk to an attorney before you do it (even if your agent says it can be done)
1 vote Thank Flag Link Sat Feb 9, 2008
We strongly discourage buyers from submitting multiples at 1 time. Some purchase contracts address this as well. There is a chance that all your offers could be accepted. You would probably lose your deposit on the ones you don't buy. There is also the chance that the sellers will contact the lender to ask about your application status. This will tip off your lender that you are making multiple offers, which looks like a mortgage fraud red flag. I recommend applying for your favorite, but make the time offer for acceptance short (maybe 4 days). This way you don't waste your time or money.
0 votes Thank Flag Link Mon Mar 31, 2008
**.."don't fall in love with one house, fall in love with three houses"..**


Vicki,

I never wrote a book, but I should because they're stealing my stuff ..l.o.l..

Anytime you're in the market to purchase .. you should have done your research for at least the last 2 or 3 months, most times knowing the market history for the last 6/8 months will give you a window for the next 6 months ...

It's not so much making multiple offers .. it's making the right offers on the right properties at the right time, the shotgun effect rarely works ... you should have some sort of chronological list or table of events..

As an example in the last house, we researched 100 homes in the area via the MLS ....
we knew how long the house was on market, history, how many realtors had the listing, tax base, what was owed and when they bought it.

Once we drove around the neighborhoods, 100 was reduced to 40 because of neighborhood, current or future construction, tax base, property limitations, positioning of the house on the lot, tree's, neighbors, size, barking dogs and how close it was to stores and schools - and most times, just plain old curb appeal .. in this instance .. lack of.

40 was reduced to 10 in just a few days after walk thru's ... and 10 was reduced to 5 after secondery walk thrus and a visit at the city planner office with google maps, so 5 was reduced to 3 after running a C.L.U.E.

Making offers is the easy part ... you have choice 1-2 -3 ... you make your offers (to a point) on choice 1, it might take days, it might even take a week or two .. but as a rule, I won't be bidding on a house that went on the market yesterday ...

If choice #1 falls out because of price difference, then walk away and move on to choice #2, etc etc ....


I never found a house I couldn't live without ........


Good luck.!
0 votes Thank Flag Link Mon Mar 31, 2008
If a seller can accept multiple offers on the same house, why can't a buyer submit multiple offers, one per house?

I read a negotiations book that said, "don't fall in love with one house, fall in love with three houses". Then it went on to advise the reader that s/he should submit at least 3 multiple offers, making it clear that the buyer has the first right of refusal or something like that. Also, add an expiration date to the offer to put the pressure on the seller to decide.

Of course, this would only work in a buyer's market, because in a sellers market no seller would put up w/ that. But considering that in the 99.57% of thee USA (I know, question was asked about the country north of here :)) j/k) is in a buyer's market, I am surprized not many real estate agents have found this angle.
0 votes Thank Flag Link Fri Mar 28, 2008
The National Association of Realtors' Code of Ethics has several Standards of Practice (SOP) in dealing with multiple offers. First of all -- a Realtor "shall submit offers and counter-offers objectively and as quickly as possible."

In fact, all offers must be submitted until the seller has made a final decision. "When acting as listing brokers, REALTORS shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. REALTORS shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord..."
Web Reference: http://www.investdesert.com
0 votes Thank Flag Link Fri Mar 28, 2008
Hi Vicki,
Yes you can place multiple offers in multiple properties at the same time but the question is why would you be doing this? I always advise my clients to concentrate on one property that fits their need and if there is more than one , Then to narrow down to a manageable number, usually no more than 3 properties. A Realtor should communicate with the listing agents letting them know his/hers clients have also placed offers on other properties and manage the offers in a timely fashion to make sure the process runs smoothly. Hope this helps you.
Leonardo
Web Reference: http://www.leonardoteam.com
0 votes Thank Flag Link Fri Mar 21, 2008
Although your Realtor may write more than one offer for you it's best to present one offer at a time. If more than one offer is presented at the same time you may end up purchasing more than one property. In order for an offer to be valid it must be accompanied by an earnest money deposit.
Web Reference: http://www.investdesert.com
0 votes Thank Flag Link Sun Feb 10, 2008
you can write offers on more than one at a time, but you must include some contingency - inspection, loan, etc. This would protect you from being committed to more than one condo at one time. The main drawback would be in letting a seller know you are doing this (and if your agent is doing it for you, they must disclose this if asked) would make the seller question your durability as a buyer and not accept your offer. In this kind of market, agents are often asked to make offers on multiple properties at once. Most credible agents (those who subscribe to a code of ethics that has honesty as its centerpiece) refuse to do this strategy. All the best. Liz
0 votes Thank Flag Link Sun Feb 10, 2008
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