The other day I was texting with a client about a home they had seen and she said, “We want to put an offer at ask, but not if over asks start rolling in on day one…” My reply was essentially, “Let’s chat asap about how a typical (multiple) offer situation can go in San Francisco.” We had the chat, and it got me thinking. Perhaps I should put this in a blog/social media post. There are surely thousands of other people out there who can benefit from knowing how it can go submitting an offer on a property in San Francisco. There are countless scenarios.
During my conversation with my client, I explained the most common scenarios, and cleared up a lot of things. I mentioned that offers don’t generally roll in on day one, as this implies a multi-day process. They typically come in all at once, and there really are countless ways things can play out.
I’ll try to describe as many of them for all of you as I can. Make sure to follow us here, or on Social @theFrontSteps for the rest of the potential scenarios. There are many.
For the purpose of simplicity, let’s say we have a Single Family Home. It is priced “aggressively” at $1,595,000 and is in a great location. We are on the buy side…being on the listing side is an altogether different situation and conversation. Recent comparables and the level of interest in this home clearly point to it selling significantly above asking price. Let’s also say the listing side has told us they expect around 5-10 offers, and they have handed out 25 disclosure packages. The disclosure package includes ALL seller disclosures. It covers pest/contractor, roof, sewer lateral, and Underground Storage Tank inspections, and a geologist report. For the sake of our scenario, the property appears “clean” with no red flags. (These last sentences alone have an entirely different education process to unpack, someday soon.)
Scenario 1
You have consulted with your friends, family, and your parents’ Realtor in Connecticut. They advise you to write an offer at $1,500,000 ($95,000 below asking) with an appraisal contingency. Your parents have advised you to get inspections on the home as well because “that’s what you do”. They also want you to make sure you have a loan contingency, even though I have spoken to you and your lender and confirmed you are “golden”, and they’ve provided a pre-approval letter to submit with your offer. (I literally will not work with buyers who cannot show me proof of lender approval or cash on hand). You decide you will sign the disclosure package if your offer is accepted.
We put the above offer together. You can literally be anywhere in the world and get it signed via Docusign. I “package” it up in one nice link to email to the listing agent. I submit your offer at the deadline. (I always schedule offer emails to send at the time they are due, never early.)
Result: I stay in the ear of the listing agent, continually asking, “how we looking?” It’s what I do and how I get buyers in contract. The listing agent contacts me back and says, “Sorry, you’re not even close on price and terms. We’ll be countering the other 12 offers.”
I’m not surprised in the slightest, but you are incredibly disappointed and your family and parents’ Realtor in Connecticut can’t believe it.
You lose. But that’s okay. We’ll do better next time. I’ll show you how. You’ll listen to me, not your parents, and definitely not an out of area Realtor.
That’s just one scenario of dozens in this situation, but check back for Scenario 2 soon and how we can make even some slight adjustments to this very same offer to make it better and potentially get a better result.