When I received my real estate license 5+ years ago, I entered into one of the hottest real estate markets in the country, at the beginning of one of the hottest real estate booms our nation would come to see. Real Estate licenses were flying out of the California Department of Real Estate as fast as they could print them. In San Francisco alone, I think the number of agents hit 5000+. (Keep in mind our population is only around 750,000+.)
Now the market has cooled, but at last check there are still some 4500+ licensed real estate agents in the city of San Francisco, and a lot less deals going around, and still “20% of agents doing 80% of the business”. So what happens to the rest? They need to pay bills, put food on the table, and pay the cost of living in San Francisco, and that leads to my theory.
The “theory of the starving real estate agent”: I think that a good percentage of the astronomical overbids, and market run up we had seen, were a result of agents pushing their clients to a higher offering price in order that they themselves would get paid. This is a theory I’ve had ever since I got my license and represented my first client on their first losing offer, and I thought, “How can you possibly make a living in real estate when you not only have to hustle to get clients, but also compete on every offer you write for them?”
Who knows, maybe I’m just frustrated myself for the countless buyers I represent that continue to get blown out of the water by other buyers, and I’m trying to come up with a logical explanation as to why this keeps happening, but I’m still left scratching my head.
I know the majority of agents in this city, especially those that I have dealt with first hand, would never do such a thing, but sometimes I wonder about many others. This is America after all. Capitalism at its finest, where only the strong survive.
A lot of the overbid prices were, in fact, a result of frustrated buyers who had been beaten out on several other offers, then just got fed up and threw in the highest offer they could and usually blew the others out of the water. But it’s the properties that sold over asking when perhaps they shouldn’t have, that give me concern, and those alone could have had a sizable impact on the market dynamics, given the limited supply here in San Francisco.
I don’t know, but it’s a burning thought that’s been lingering in my head nonetheless, and aren’t you lucky I’m sharing it with you. ;-)
And yes, you heard me correctly, multiple offers are still happening…regularly.
–Why’s this keep happening to me!? [theFrontSteps]
–636 Steiner, an offer and a UFC style beat down [theFrontSteps]
–Battle Royale: San Francisco or New York City, if you had to choose [theFrontSteps]