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A Buyer Makes Offers on the Same Property Three Times, Is It The Charm?
A buyer makes offers on the same property three times, is it the charm? This really just happened. In decades of selling real estate, this was a surprise. The first time the buyer wrote a very low offer per the seller, when there was a substantially higher offer on the table. The second time the offer was a bit higher offer, same buyer. The third time it is a viable offer, but is that high enough for the seller?
The first offer the sellers did not respond. They felt it was too low given the comparable sales on homes that had the same floor plan. Meanwhile the home went pending into contract with another set of buyers. So this same buyer submits a second offer, as a backup offer. The seller rejected the backup offer, still too low, he said. The property then fell out of escrow through no fault of the seller. The seller has been working hard every day to ensure the home shows well.
Believe it or not the same buyer submits a third offer, and it was presented to the seller. We all appreciated that the buyer had not given up. The seller is currently thinking it over, felt this was an improvement and is considering the offer. We had several agent showings at our open houses, held by our team members, this last weekend. The open house traffic reported several agents through our listings with a few interested parties. This was the feedback the seller was waiting on to make a decision.
The buyer’s agent called me to say the buyer was very committed and truly wants this home. I explained the seller wanted to wait over the weekend to evaluate the market and the feedback from the open house. The buyer’s agent said she would wait for the seller’s response. Stay tuned to the Blog for an answer this week to the question: If a Sacramento buyer makes offers three times on the same property, is it the charm?
If you would like to make a strong offer on a property and get it accepted, call Weintraub & Wallace Realtors today. One of our experienced exclusive buyer’s agents will be happy to help. Call us at RE/MAX Gold Real Estate 916-233-6759.
— JaCi Wallace
How to Submit a Back Up Offer
The real estate market in Sacramento is so crazy that a really smart move for any aspiring buyer might be to try a back up offer. The problem is no inventory. Now, you would think that little inventory would have solved the problem of flakey and indecisive buyers, especially for those buying Sacramento short sales, but it hasn’t. Buyers still abruptly cancel transactions even though their chances of being able to buy another home are dwindling as surely as the minute hand on that clock continues to move.
An agent called me several days ago to explain why his buyer was canceling. Like I give a crap. Canceling is canceling. He said the buyer’s lender did not explain Mello Roos to the buyer and therefore had incorrectly quoted the buyer’s pending mortgage payment. The buyer had not counted on having to pay an additional $100 a month or so. Except when I looked at the original offer tracking sheet, I discovered the buyer’s first offer had been $10,000 over market value. I was the person who had explained to the buyer’s agent that the home had to appraise. The buyer had originally agreed to pay a higher mortgage payment, but now that the price was less, that same payment was freaky. Wha?
Logical or not, buyers do suddenly cancel purchase contracts. That part hasn’t changed. I don’t think they understand the market, and why should they? Home buyers are bit players. One person buying one house. Investors and real estate agents who are active in the Sacramento market realize how difficult it is to buy a home right now. The median sales price has gone up from $155,000 a year ago in October to $180,000 last month. Yet, another reason why it’s smart to lock down a potential purchase through a back-up offer. Lock in that lower price.
When a seller signs a back-up offer, it means if the existing buyer cancels, the new buyer moves into first position and becomes the buyer. There is no going back on the market as an active short sale or active listing. The home is never exposed to the market a second time.
But you can’t just send the listing agent an offer and say:“Keep this in backup.” Well, you can, but it won’t be in backup. You need to submit a formal Purchase Agreement Addendum (PAA) with your purchase contract. Moreover, you can’t just sign a PAA and send it. It must be completed. Don’t cry Ma. If an agent doesn’t fill in the two spots in Section 1, the PAA is incomplete. One spot signifies the position for the buyer. Does the buyer want to be in #1, #2 or #3 position? The second spot indicates how long the buyer is willing to wait for the existing buyer to cancel. Is it 10 days? 120 days? A year?
You can also use a much simpler form, the C.A.R. Backup Offer Addendum.
Of course, if a buyer offers less than list price or something else is incompatible in the offer for the seller, the seller is not obligated to accept a back-up offer. Sellers are never forced to accept a back-up offer — even if the home is offered for sale as an Active Short Contingent. But most sellers are happy to receive a back-up offer and will accept. Like with anything in real estate, your offer needs to be signed, dated and in writing.
