Ask the Broker: Are buyers really willing to overpay in this market?

I’m always happy to brag about my listing prowess, and I could not be more delighted to have gotten this question in yesterday’s email. But: Even so: This is how I sell homes faster for more money.

So: A client and I are working out the details for a home that will list on October 8th, and he asked the Ask the Broker question: “Are buyers really willing to overpay in this market?”

In suburban Phoenix? Only the ones who want to buy houses. We’ve been strong since 2014 and before, very strong this year before the pandemic, strong throughout – and all the while we are benefitting hugely from the exodus from other states.

This was my answer to my investor client:

Almost everything I have sold in the past five years has sold with multiple offers, most over list, many for cash. My last listing sold the day before it was to go into the MLS, so that’s not a fair test. My last lease had many applications and the winners paid the full year’s rent in advance.

Things will change in the time we have to wait, but we still should have strong demand. We will have to appraise for financed offers, but if we get lucky, we’ll get cash buyers or waived appraisal contingencies. Not all buyers are equal in their appeal, but the poorly-qualified offers come in high, which is useful for torquing the better-qualified players.

We list on Thursday morning, just after midnight, to capitalize on the search-bot instigated weekend showings. I disclose the state of play on all offers in the private remarks in the listings, so agents always know where they stand. We want the highest/safest/soonest closing, but among highly-comparable well-qualified offers, we want to know who wants it more.

Like this, just explicit, transparent arm-twisting that only the agents can see:

Available, go and show. Priced to market. Priced to move. Seller to review offers Monday night. The state of play on offers will be documented here, as they come in. Don’t dawdle: This home should sell fast. *** Best Cash: $211k, no costs, 21 days. Best Conv: $215k, no costs, 45 days. Best FHA: $218k, no costs, 30 days.

My goal is a feeding frenzy from Thursday to Tuesday, by which time I want an all-cash or strong conventional buyer who has demonstrated that he will walk across broken glass to close.

This listing praxis is my gift from the housing crash, for what that’s worth. Every choice we make gives the seller the best possible chance of eliciting multiple offers in the first few days of the listing, which in turn is his best chance of beating the market.

I am blessed by very smart clients who let me produce the best attainable results for them. But I’m blessed by questions like this, too. We learn best by teaching, and I think best by writing. BloodhoundBlog is industry-focused, but we’ve always been available to regular folks, to clear the fog of verbiage that beclouds real estate transactions.

So: If you have a question, ask it.