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Suspicious Buyers: Multiple Offers, Highest & Best, Sold for Higher than List Price

Placing offers and negotiating is a complicated thing. We are coming off an age of negotiation where people became comfortable putting in low ball offers hoping for a bargain and prepared for a counter. Today, however, the situation is much more complicated, the list prices are not so negotiable and bidding wars are stressful. Maybe you don’t know for sure what kind of interest your potential house is getting, but I can tell you that in this market today, multiple offers, bidding wars, and higher than list price sales are happening commonly. The house next door to me is an example of what  has been going on in real estate, all that has gone wrong, and who has been hurt.

The Tragedy and the Multiple Offer

I watched the house being built.  I snuck in on a regular basis and checked out the progress when no crew was present. In fact, I have B&E’d just about every house on my street.  When we moved in here, ours was only one of a handful of houses built. I wasn’t a real estate agent back then so I didn’t think in terms of laws, safety concerns and private property. Just neighborhood curiosity. I didn’t bake muffins or bring welcome baskets to my new neighbors, but I did assess their property before they moved in. The house next door was no exception.

So I watched it being built and we made fast friends when the new family moved in in 1999 ish.  Even confessed to the trespassing! The Mrs. and I talked about our kids together,  bought hanging baskets for each other when planting time came, attended each other’s home parties, and gladly sent our husbands off to play together shooting clays and such. It might have been 2001 when they had their third baby.  Jonathon with the full head of black hair… I can still see him and smell him in my arms. Too bad it was only two weeks later that Hubs and I were eating fruit on the back deck early on a Sunday morning when Mr. Neighbor came walking across the yard- his head held low with the news that baby Jonathon had died.

We tried desperately to hold them together over the next several months but the loss was too much and Mr. & Mrs. Neighbor split up. They had paid almost $250,000 for the house only two years prior at the height of the market, and it was already declining in value – they couldn’t sell it. In 2003 it was listed at 160k and sold for 168,500. There are two things to pay attention to there… 1) the drop in price and 2) it sold for more than it was listed. I highlight that because so often buyers are suspicious of the “highest and best” scenarios and claims by agents that other offers are coming in.

Rental Fraud and the Multiple Offer

So the new neighbor moved in. We were all in awe of what a fantastic deal the house was at 160k, yet also pessimistic about the affects on the value of our own homes. It was the first of many foreclosures to come.

Now this neighbor was not as ideal as the Mr. & Mrs.  Much gossip and silly behavior eventually led to her moving to Florida with a fella. The house couldn’t sell because she owed too much so she took in a renter.

GREAT! (sarcasm) A renter. We had already had bad experiences with renters in the the neighborhood and were not looking forward to having one next door. Guess what! She was awesome! She owned a business downtown Flint and was one of those sunshiney people that made you smile when she drove by or was out in the yard when you pulled in.  Too bad the owner of the house, Silly Pants who moved to Florida, had been taking her rent payments but let the house go into foreclosure. My new wonderful renter neighbor came home one day to a notice of eviction. We stored some stuff for her catering business in our garage until she made arrangements for everything.  More heart break on Meadowlane Ct.

So the house went into foreclosure again and in 2009 was listed at 92k. NINETY TWO THOUSAND DOLLARS! That plus all the other repos that had come and gone in the hood sealed our fate.  We were actually naive enough to think that we would never go negative.  Now we are, which is not a huge deal because we don’t have to sell and we’re fine with our payment. But we feel a little too close for comfort to the misfortune that has crippled the Flint area. And I am pretty cheesed that I can’t sell and get a piece of that $8000 home buyer credit if I’m being really honest. Anyway…

As it turned out the house sold for 109k, thank goodness for another multiple offer, highest and best situation. How do we know it was a true multiple offer situation? I wrote one of the other offers and we lost it because that buyer didn’t believe she really had competition. Too bad for her but what a fantastic deal for the new owner. Another great neighbor, by the way. My daughter interviewed her and her son one day when they were scouting the property before their closing. She determined that they were nice people and that we should give them a potted plant to welcome them and clear away some of the negative juju that may have accumulated.  So we did.

I am happy to report now that although there are some foreclosures scattered throughout the sub, our street is filled with home owners. And with a note of optimism I point out that the house right behind me, slightly inferior to the house next door, listed 7k higher at 99k.  Perhaps a sign of inching higher value? In a bittersweet accomplishment, though, I rushed in with a full price offer… no need to over bid because I urged the buyer to be fast to avoid a highest and best situation… yay for her, but there’s a few more bucks off my square foot value. What a complicated business.

Life and real estate negotiation may be hard but you know what is a no brainer decision? BUYING right now if you have nothing to sell first. There is money with your name on it right now and prices are ridiculously low. They won’t stay here. There are already signs of rising values across the country. You only have ten days left to make an offer and get it accepted. Hurry!