Once again we have an overly heated market in the Bay Area!
I made an offer on a townhome in Pacific Heights for my lovely first-time buyer couple. The list price was $1,695,000, my clients offered $1.9M – and they didn’t get it since there were 8 offers including a winning offer of $2,225,000! Even so, at the same time as accepting the $2,225,000 offer the sellers wanted a back-up, so they made a counter-offer at $1,950,000 to my clients.
When this happens, if the buyers accept that counter-offer they only get the place if the first offer falls through. My clients agreed to be back-up and while being second is nice, it’s not first place. Considering that the higher offer was all cash with no contingencies (almost no way out), my clients didn’t expect that it would fall out of contract and it didn’t. However, knowing that we were in back-up at $1,950,000 tells me that the buyers paid $275,000 more than they needed to pay. Crazy market!
A colleague of mine just lost out on an offer for a 4-bedroom home in the Parkside. It was listed for $1.1M and though his clients made a very, very strong offer of $1.8M, they were in third place and lost out (we don’t know what it sold for yet). This week at my office meeting I listened as someone spoke about a home that just sold for $800,000 over the asking price. These stories are the norm these days.
In this market, multiple offers are common and it is not unusual for buyers who are competing to waive all of their contingencies, so check out my blog post on how to proceed as a buyer in a crazy seller’s market. An article last month in the New York Times also addressed what buyers need to do these days in a very competitive market.
Try to relax since we’re at one point in a cycle, and it will not last. Things heat up and things cool down. Hang on for the ride! 🙂
If you need someone to guide you through these crazy times, don’t hesitate to give me a call. Sign up on my blog if you want to receive my next post about different types of loan approvals and which one you should have if you want to be competitive.