Home Buyer Lost The Bid, But Won The House!
Home buyers, Frank and his wife were living in a small starter home in Fenton, MI. With three children and a fourth on the way, they had outgrown house and were looking for a big upgrade in Green Oak Twp.
The market was hot and multiple purchase offers on a single property were common. Frank had already secured a mortgage and was now “armed and ready” to secure a contract.
The Wind Up
After several weeks of looking, they fell in love with a large custom house in Hartland Township, Michigan. It was ideally located near main highways and a quick and easy drive into Brighton.
The home was a beautiful 3,000 SF open plan featuring floor to ceiling windows along the rear of the house, wrap around multi-level deck highlighting the wooded backyard. The four-sided fireplace separated the eat-in-kitchen area from the spacious living area. A full finished basement with, beautiful wet bar, recreation room, custom brickwork and moldings and a walkout to patio under the deck. Plenty of space for them all to spread out. They fell in love with it immediately and we placed a competitive offer.
Here’s The Pitch…
Well, as sometimes happens, we lost the bid to another buyer. We came in second. Although we kept looking, I knew my buyers had their hearts set on this property and as such, I kept a close eye on it.
TIP: Being outbid doesn’t always mean you lost the chance to obtain the property forever. What often happens is that something comes up during the home inspection and if negotiations turn sour, the home buyer pulls out.
Even though I asked the listing agent to let me know if the deal falls through, I knew I couldn’t count on that. Most real estate agents don’t bother. So, I kept in touch through email initially. After seven days, I heard nothing so I tried calling the agent but my calls went to voicemail.
Rather than assuming that everything was moving forward, I asked my assistant to inquire about the property directly through the listing brokerage. He called and asked if the house was still available.
Here’s the kicker…Thinking
Now, the listing agent for this property was a ‘hot shot’ in the industry so I won’t mention his name here. Nonetheless, he knew full well that my buyer was still interested. According to the listing agent, our offer came in second place. So why didn’t he pick up the phone and call me as soon as he saw the writing on the wall?
I’ve listed and sold many properties and in multiple offer situations like this, and in my opinion, there are too many listing agents who don’t bother reaching out to the buying agents who have previously submitted offers on the property. I believe they do a great disservice to their clients.
TIP: As frustrating as it
is,when a purchase contract falls through many Realtors will simply relist the property to “Active” and drag the sellers through the process again. I don’t like this practice and more often than not, think it’s unnecessary when you’ve had multiple offers.
Sliding Into Home Base…
We had to act quickly! I didn’t want my home buyers to have to compete for the same house twice, so I went over my plan with Frank and then proceeded to re-submitted our offer.
There are some key strategies home buyers can employ to gain an advantage when submitting a purchase offer. Read “Home Buyer Secrets – How To Win The Bid“.
This time, I contacted the listing agent’s assistant and told them I knew of the current situation and that my buyer was ready and willing to step in after the remediation was completed. She wondered how I knew so much but was legally now obligated to present our offer to the seller once again.
Before the property
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Side note, we found out late in the game that the sellers were divorcing and needed more time to move. It’s always a good idea to work with the sellers whenever possible. Life throws us all curve balls, if it means you wait a couple of extra weeks, so be it. Personally, I’m a big believer in ‘what goes around, always comes around’ to you.
TIP: Even the highest bid can lose over another offer that gives the sellers some flexibility on closing and occupancy dates. Before submitting a purchase offer, have your Realtor find out what challenges sellers are facing. More often than not, it’s timing.
In Frank’s case, the extra 30 days gave us plenty of time to list and sell his current residence and quickly find a buyer. In this instance, Frank was not reliant on the sale of his current residence and we had to make that clear to the seller.
Tip: If you are reliant on the sale of your current residence to finance the purchase of your new home, my recommendation in this instance would be to secure a buyer for your current residence first. You can negotiate occupation date so as to provide you with the time needed to purchase your new residence. This places you in a much stronger purchasing position. Occupancy
datesare negotiable and often change even after the contract is signed. It’s crucialyou make sure your buyers are flexible before you sign the contract.
Key Take Aways
Through determination and a clear understanding of how most real estate agents operate, I was able to give Frank the advantage he needed.
A big factor was that although the listing agent was unresponsive to my follow-up calls, I didn’t just assume things were moving forward. This meant that I had to use a little creativity to find out what was really going on behind the scenes. Also, not to be diminished was Frank’s willingness to remain flexible with the seller. A really big plus!
I’ve been in real estate since 2011. I’m also a property investor and flipper and I use my experiences to the benefit of each of my clients. The mistake I most often see is when consumers assume that all real estate agents are equal. This is a huge misconception.
I work with many Realtors every day. Some are terrible at communication and follow-up, that’s true. However, there are plenty of others I’ve worked with
Addressing The Elephant In The Room
Again, it bears reminding that this listing agent is a hotshot in the area and yet, he why did he fail to contact me knowing I had a ready and very willing buyer waiting in the wings?
Related: Tips To Buying Your First Home
The answer is pretty simple really, better to relist the property in the hopes the listing agent can secure the buyer as well and therefore, get both sides of the deal. In this scenario, he was willing to place his own interests ahead of his client’s. That’s the truth and sadly, it happens more often than not.
As a licensed real estate agent in Michigan, I find this behavior disgraceful. I take my fiduciary duties very seriously and my first priority is always to my clients. It’s nice when I can secure both sides of a transaction and in that instance, I make sure that it benefits both the buyer and seller. Communication is a whole lot easier when I’m representing both sides. Nonetheless, whether selling a home and/or buying one, my
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