Once again, unsettling things going on in the market #700

#700 in a series of true experiences in real estate

There are once again unsettling things going on in the market. You already have heard, no doubt, that there are houses on which twenty, even thirty, offers are made. You probably know that overbids are common, that many houses are selling for one hundred thousand dollars more than asking price, sometimes spectacularly even more than that.

We hear about new ones every day. Just when we think we’ve been shocked beyond our ability to be shocked further, there’s a new story. A very worn-out Berkeley house, uninhabitable, in fact, attracts 10 all-cash buyers and sells for a million dollars. Another in Berkeley’s Elmwood gets 14 offers and sells north of 150% over asking. And, of course, there are many other examples.

“How can that be?” agents ask one another. “That house with the original, old kitchen? It was charming, but… it sold for what?” We run in and out of houses on tour day, hear snippets of conversation, and stop long enough to find out the details of another unbelievable sale.

We hold open houses and are amazed at the numbers of potential buyers. Some of them pause to talk, to tell us that they have bid on six or seven or ten different houses and lost them all. At one open house, a woman stood in the kitchen looking decidedly sad, so much so that Anet asked what was wrong. The woman answered that the house was so beautiful; she was sure that she and her husband could not bid high enough to buy it. They’d already lost nine others.

This would-be buyer was standing in a house that she would like to own, but she was in the process of a mental forecast, going over a scene she’d experienced before. She could hear what the conversation between herself, her husband and their agent would be, how they would decide how much to offer, how far to go over list price. Then they’d write it up and after that, they’d wait, fearful to hear how many offers there were, and eventually, who had won. She was sure it wouldn’t be them; they’d be disappointed again.

These are sad stories. Buyers are searching for houses to buy that are further and further away from where they intended to live. If they began in Berkeley, they’re now looking in El Cerrito, Oakland or San Leandro. If they had in mind living in San Francisco, they’ve given up on that idea and are looking for houses in Berkeley. Still, many remain unsuccessful.

Unfortunately, in the course of the frenzy, some important courtesies have, in some cases, gone by the wayside. For example, most agents have given up on face-to-face offer presentations. They tell buyers’ agents that they’ll accept sealed bids on a certain day. “Just email them to my office by 5:00 p.m.,” they say, and the buyers’ agents, having no option, do just that. They are not afforded the old-school opportunity to personally meet with the seller, to describe the offer they have written and to talk about their buyers, why these buyers selected this particular house.

Later, often the following day, these agents whose buyers are anxious, perhaps unable to sleep as they wait to hear the outcome of their bids to buy, call the listing agent to ask who won. We have been told that there are listing agents who do not even bother to let the losers know that they’ve lost, let alone thank them for their efforts. One agent told us that she learned her buyer’s offer had not been accepted only when the pending sale showed up on the multiple listing computer.

There is discourtesy from sellers, too. We’ve heard about sellers who offered their houses at a certain price, listened to one or more offers, then decided that none was high enough, so raised the asking price. This is not right. Perhaps the highest offer received was “only” $100,000 over list whereas the seller had his heart set on an overbid of a lot more. Disappointed (and greedy), the seller refuses to sell, raises the price, and waits for another buyer.

While no seller can be made to sell his house, the list price should be carefully considered and should be a price that the seller would be willing to accept, not just a “jumping off” place which the seller may abandon later.

It is our feeling that in this wild and crazy market, it must be remembered that it is the buyers who make the market. Without them, after all, there would be no sales.

Especially at this time, we think, sellers and their agents must bend over backwards to offer everything possible to buyers. The selling of houses often occurs these days very quickly. A buyer sees the house for perhaps an hour or two, then must commit in a big way to buying it. For this reason, for the stress that accompanies such a move, for the sake of simple good grace, every effort should be made to obtain and provide all manner of information about the condition of every house. Disclosures must be thoughtfully and fully written, bids for termite and other work made available before offers are made.

It’s just no good for a buyer to find that the person holding the open house isn’t the listing agent but a substitute who knows no particulars about the house. It is wrong when whomever is there does not yet have a termite report, has no idea what the age of the roof is, doesn’t even know if stove and refrigerator are included in the sale.

This isn’t a sweater or pair of shoes that is being sold; we’re talking a big, life-altering purchase here. The only appropriate way to go about selling is to be thorough and mannerly.

This is a good time for sellers. Buyers are making it so. It is therefore the best time to treat the customer better than ever.

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