Our next podcast in our buying and selling in the current market series is here, this time with a focus on bidding on potential new properties.
Marcia and I take a look at the other end of a multiple offer scenario- being a bidder on a property.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Buying & Selling in the Current Market – Part 3
René Nelson: Marcia, on the last show we started talking about multiple offers, and I know that you’re seeing that. You mentioned 60% of all offers are in a multiple competing situation. I get up every day to win. How do I help somebody win when they go to bid on a house or go to make an offer on a house?
Marcia Edwards: Well, it’s interesting because I tell people I do real estate smart and I’ll help you do real estate smart, that’s kind of my little thing, but it’s kind of like they’ve lost their head in some of these residential purchases. And it’s hard to do the math and justify, if you say the median… A median offer that’s accepted is that and run it through your list price, then you take that and apply it to a particular situation. You may not compete at all, so it’s really tricky to know where to start.
René Nelson: And how do you know that? That’s a really good question. Let’s talk about that. If I come to you and I want to buy a house and it’s listed at 300,000, how are you going to advise me?
Marcia Edwards: Well, at first I’ve gotta look at it through the lens that will it appeal to a lot of people. It’ll appeal to empty nesters and first-time buyers, that’s a huge pool. 40% of the buyers were first-time buyers last year, so you’ve got a lot of the markets going to be attracted to it.
You gotta make sure that you know if a lot is going to be attracted to it, the competition’s going to be steep. If there’s something that eliminates, like let’s say the second bath that’s claimed to be a three-bedroom, two bath, the second bath is off the laundry room, instead up off the master bedroom, that might disappoint some buyers, so we’re looking for any edge that we can see that would eliminate other buyers and see if you could solve the problem during your ownership. That’s one part of it.
So you want to make sure that you have a realtor by your side that’s looking at it through a lens of resale when you go to buy. If it’s something mainstream, you can still compete, but you’ve gotta understand that if it’s that mainstream, it’s going to go for over 103%.
René Nelson: Wow, that’s just crazy. Okay, so years ago, when you would start to look for someone, a lot of times you would start with 50 or 100,000 over whatever they told you they wanted to start looking at, because you knew there was negotiation room. I bet now when somebody calls you and says, “Hey, I’m qualified to buy 300,000.” You stay right in that wheelhouse, because you know you’re already going to have to bid up to get it probably, right?
Marcia Edwards: Right. I’ve got three buyers currently who all have cash, who would not like to spend the 500,000, but may need to. We’re looking at homes around 350 to 400, so we’re prepared to buy up if we need to. So you’ve really gotta be conservative with your numbers and make sure that you can use the numbers to your advantage if you have a margin to work with.
René Nelson: Interesting. At the next show, let’s talk about seller pay closing costs and concessions, ’cause I bet you that’s none.
Marcia Edwards: It’s not a lot of that.
If you’re looking to expand your real estate investment portfolio, René is here to help. Schedule a 15-minute discovery call to better understand your investments and the market today.
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