It’s a little funny that when Silicon Valley home sellers and their listing agents get contracts or offers, many do not want to deal with issuing or negotiating counter offers. In many cases, it can go like this fictional bidding scenario:
Offer due date set, and let’s say there are 5 offers. Of the five, perhaps one is all cash, one is half cash, and the rest are 20-25% down. Most offers will be in a tight cluster of pricing (this is probably “true market value”). One may be far higher than the rest. Or perhaps two a little higher than the others.
- The seller wants all cash and the highest price. And if anyone has few or no contingencies, the seller wants that too.
- If the all cash offer is non-contingent (no contingencies for inspection, loan or appraisal) and is the highest price, there will be a straight acceptance. No counters.
- If the best combination of cash and contingencies and pricing is the half-cash offer, most likely the listing agent will phone that buyers’ agent and ask if those buyers would match the highest price. If those buyers say yes, one counter offer will be issued and it will have a short deadline for response.
- If the “best combination” buyers say no, the listing agent and sellers will move to the next best offer, however they decide “best” looks, and phone them, giving them the opportunity to come up.
- In these scenarios, meanwhile, the rest of the buyers and their agents wait – and hear nothing in the meantime.
Once in awhile, there are a few good offers that are all neck-and-neck, and perhaps there’s one flaky looking offer at a higher price. If that happens, the listing agent and sellers may issue a multiple counter offer to most or all bidders. That used to be really common, but today, I’m finding the most typical scenario is the “one phone call” approach instead. (more…)