Those who have been paying close attention to how the houses for sale in CentennialCherry Hills VillageGreenwood VillageLone Tree have been performing may have observed the results of the dreaded “multiple offer situation.” When a closing price seems to rise unexpectedly, it could be because of something called the “Notice of Best and Final.”
That notice can be issued by a listing agent as soon as more than one offer is on the table. Experienced real estate agents sometimes choose this strategy to win the best price for their client. It instructs all interested buyers to submit their “best and final offer” by a deadline (usually within 24 - 48 hours). Since no counters or escalation clauses are allowed, one blogger has aptly called it Multiple Offer Sudden Death. Here’s how it works:
·The seller’s asking price is listed at, say, $320,000.
·Buyer A is interested; bids $310,000.
·After a few rounds of negotiation, the seller and Buyer A near agreement at $316,000, when-
·Buyer B, not knowing that the seller is nearing agreement with Buyer A, submits her own bid.
·The seller initiates Notice of Best and Final, giving both parties two days to submit their last offer.
·Buyer A begrudgingly goes up to the full list price: now offers $320,000.
·Buyer B shoots all the way up to $329,000 – the offer which is accepted.
In this scenario, Buyer B not only paid $13,000 more than Buyer A was about to pay, but also paid $8,000 more than needed to beat Buyer A’s top price.
Great news for the seller, for sure — but less exciting for the buyers, since what was a great deal just becomes so-so. That’s why I advise my buyer clients to do their best to remain emotionally detached. I suggest deciding on the true value you believe the home is worth, then sticking to it, no matter what!
Jason Peck is part of the Carr Peck & Associates at Keller Williams. He has been recognized locally and nationally as in expert in real estate. Locally he is 6thin Denver Metro home sales out of 5,000 agents and has been recognized by the Wall Street Journal and Real Trends as one of the top selling agents in the country. He is co-author of the National Best Selling Book, “The New Rise in Real Estate”. For more information feel free to contact him or call 720-446-6301.
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Author:Jason Peck Phone: 720-446-6301 Dated: April 23rd 2013 Views: 3,812 About Jason: ...
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