Home Buying in Bucktown>Question Details

Weary, Home Buyer in Chicago, IL

Despite making two almost full-price, non-contingent offers, we ended up being outbid and losing out on two

Asked by Weary, Chicago, IL Thu Jun 19, 2008

(!) different homes in Bucktown that we had really wanted -- this was twice (!) in the last 3 weeks. I think we need a new agent - she's nice but can't seem to help get us the home we want. Your thoughts?

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Not know more then what you have briefly described, two things come to mind . 1. when asked to make your hightest and best offer, did you not do so? If you did bid your best, then no one is to blame as far as I am concerned. If you held back thinking that no one would pay more or construct a better offer, all you are is wrong in these two instances. 2. I would say you agent is doing a pretty good job, if you have been in two muliti-bid situations in the last 3 weeks, then you agent is showing you great propeties and has educated you to the point were you are "pulling the trigger". Keep trying, it will workout for you.
3 votes Thank Flag Link Thu Jun 19, 2008
Weary,

For listings to sell in this market they must be right-priced. If this describes the homes you favored, it is not surprising that another party was simultaneously interested in them. Plus you're looking in an ascending neighborhood in Bucktown. The only measure one might take of your agent is how he/she "set the table" for you. By this I mean were you cognizant that you needed to make the strongest offer straight away?

What I tell clients in situations like this is "how much will losing this home hurt?" Then we translate this sentiment into a price tag, whether it's $500 or $5000. But this amount can be solely determined by the client.

I bid you good fortune and wise counsel as you proceed.

Tom McCarey
The Real Estate Lounge Chicago
1 vote Thank Flag Link Thu Jun 19, 2008
Unfortunately in a bidding war, one party always loses! The ultimate decision about how much the buyer pays is up to the buyer. Perhaps you should have gone with full price offers. Many homeowners today, finally realizing that the market has changed, are pricing their properties aggressively lower to attract more bidders and to get a quick sale.

Depending on the property and its value, the list price may have been undervalued to the market and someone paid full list price or even more. Your agent should be able to determine the value and then together you can decide what the right bid should be.

One of my clients was just involved in a 5-way bidding war for a property in Old Town last week but they had to pay over the list price to get it. Even in this market, for the right property there can be several interested buyers.

Also today it is more important than ever to be pre-approved for a mortgage through a reputable lender. I mean full pre-approval meaning you have already give all the documentation to the lender. So many pre-approvals I see are really pre-qualification letters and only slightly better than meaningless because they only based on a credit check and what the buyer says their income is without any documentation.

I often recommend to my sellers that they not accept offers until the buyer has been run through the mortgage lender's automated underwriting system. As a buyer you should have your lender do this for you. It will make you stand out in a crowd of only pre-qualified buyers.
Web Reference: http://www.esmrealty.com
1 vote Thank Flag Link Thu Jun 19, 2008
I agree with Jim. It actually sounds like your agent is doing a very good job in finding houses that are great values. Once that occurs, as others suggest, make sure that your offer is as strong as possible. Make sure you're at least prequalified, if not preapproved, and make sure the seller knows that.

Know the true value of the property, which may be less, the same as, or even greater than the listed price. If the houses you wanted were significantly underpriced, then perhaps an offer even higher than the listing price would have been appropriate. Keep your offer at or under what you determine to be its value. But adjust it, as Tom suggests, based on how much you want (or can live without) the house.

And try to get feedback from your Realtor on how you could have strengthened your offers on the properties you didn't get.

Good luck.
0 votes Thank Flag Link Thu Jun 19, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Dont be discouraged. It is a very strange market out there. You would think in a buyers market, it would be much easier. Make sure your agent is submitting a letter with all offers explaining who you are and a little about your family. You need to tug at some heartstrings sometimes to get your offer to purchase noticed. Jeff Verry
0 votes Thank Flag Link Thu Jun 19, 2008
It seems that your are buying in a market that is hot. We have all experienced this market from time to time, and if I was your agent and had this great market available, I would recommend that the next house that came on the market that you fell in love with, I would suggest putting in an offer at least $1000. over the asking price with a very short window for the seller to accept and no contingenices
0 votes Thank Flag Link Thu Jun 19, 2008
You're doing fine! It's always frustrating losing a house that you felt strongly enough to place an offer on. The market has been picking up for well priced property. There certainly is an abundance of choices out there, and I'm sure you'll find the perfect property.

I would suggest evaluating your approach to offers. No contingencies is great but it's not the only item sellers are concerned with. Many sellers are wary of contingent deals in the current market, but they still fly, especially if the buyers agent for the contingent offer does a great job presenting the offer, and pricing the property that needs to be sold. The seller will take a hard look at what the buyer has to sell, and gauge the risk. Real estate sellers are very complex and every seller weighs the facets of each offer differently. If the seller does not NEED to sell, they may favor a contingent contract over a less competitive contingency free contract.

As far as your agent is concerned, he or she should be giving you accurate feedback as to why the other offers were accepted over your offer.

For example, How much earnest money were you placing on the deal? This is crucial to making your offer more competitive.

Is you closing date attractive to the seller?



You should also appeal to the seller's sense of pride in their property. If there is something about the house you love, make sure you draft a letter to the seller letting them know why you want their home. Small personal touches help you stand out in competitive situations.

I agree with Jim Roth in that your agent is definitely getting you into the hot properties (as demonstrated by an 0 for 2 record so far), so it is likely they are doing a fine job.

Good luck. If it's meant to be, it will be.
0 votes Thank Flag Link Thu Jun 19, 2008
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