The Real Deal
Multiple offers are a modern phenomenon
By Sunny Dykwel
The momentum in the current real estate market has given rise to a unique phenomenon, which I have not seen in my 20-plus years in the business. Multiple offers have become the norm.
The marketing of most of the homes in the Multiple Listing Service follows a fairly predictable sequence. First, the home will be listed in the computer, then toured by the Realtors within a few days. The listing agent and sellers have prepared the home for market; including physical and pest control inspections, preliminary title report, repairs, cleaning (including staging the home), completion of various disclosures by the sellers and agent, and reports completed by specialist companies, such as a geological consultant.
With this information at hand and available from the first day, the property comes on the market, the movement of the property from "available" to "pending sale" status occurs within a very short time, usually within seven to 10 days. New buyers will not be able to react at the speed necessary to purchase in this current hot market. It may take a buyer losing out several times to realize what is necessary to compete and win!
The real estate agent should secure a disclosure package for the buyer, containing all of these reports. The buyer should read them carefully, discuss them with his or her agent, and perhaps secure additional inspections of their own. All of this should occur before an offer is prepared and presented. It is best that the offer to purchase includes a copy of the disclosure package, all pages signed and acknowledged by the buyer. Thus, the offer is often presented with no inspection contingencies and with all the disclosures accepted.
In addition, the winning buyer is often willing to take the property in "as is" condition, with no additional repairs by the seller.
In order to compete in this market, the agent will advise the buyer to see a lender before the buyer begins the property selection process. The lender will provide a "pre-approval" letter to be presented with the offer, stating that the credit report, verifications of employment and down payment are approved. If the buyer makes a successful offer, only the lender's appraisal of the property is needed. In many cases, the buyer can pay "all cash" and therefore a loan is not required. Sellers prefer these "all cash" offers, especially when the buyer submits copies of assets and accounts. Needless to say, winning buyers do not have financing contingencies.
Close of escrow, historically, has been another negotiable point. Today, most sellers look for a quick close, often two weeks or less. I have even heard of one two-day close.
Sunny Dykwel is with Alain Pinel Realtors, Palo Alto. Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors. Send questions on any topic to: Ask Your Realtor, c/o SILVAR, Los Altos District, 345 San Antonio Road, Los Altos, CA, 94022; call 650.949.9115; or send email to ppompei@siliconvalley-realtors.org.
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