Real Estate Tips - How one of our out of state buyers viewed homes and beat out 10 competing offers
Updated: Jun 7, 2021
There are some interesting stories going on in the world of real estate so I thought I’d take a moment to share with you a recent real life experience with one of our buyer clients 😊
We received a referral from a Realtor in the Seattle area from a fantastic agent we’ve known for years. They had a client whom was looking for a property near ASU for their son whom is attending Grad School in the Fall. We did the usual setting up searches, discussing different property options and the market.
All buyers, especially if they’re from out of town, will start with a large search radius. Then they’ll narrow down and focus on certain areas, data points etc. We eventually zeroed in on Mesa as it’s just to the East of Tempe where ASU is AND it’s not quite as pricey. It’s VERY popular with Millennials and the downtown area of Mesa is booming with restaurants, breweries and the light rail runs right through it and into ASU and on to Downtown Phoenix.
Our clients didn’t fly in to see properties we instead did FaceTime appointments where I’d go to the property and walk them through it. If they seemed to like a certain property I’d walk around the complex and or drive the neighborhood. One evening I even drove to ASU from one of the units so they could get an idea of the commute and what was around.
The first property that peaked everyone’s instance was a condo about 8 minutes from ASU. We wrote an offer on it however we didn’t get it. The listing agent was vague about how many offers they had and what those offers were saying that herself and the seller decided not to disclose any information about competing offers. Basically this put us in a highest and best situation with no clue of how high to go. I won’t go into details on this one suffice to say we were 2nd place and didn’t get it.
More searching and FaceTime put us in a cute ground floor condo that was pretty much move in ready off Mesa Drive and north of University Drive. This listing agent was clear in their directions saying highest and best but wouldn’t divulge exactly what was on the table. She did say there were over 10 offers and they were over asking. It was listed for $205,000 and some 2nd level comps were much higher so we thought that it could comp out in the $215-220K range. So we made an offer at $225,000 guaranteeing $5,000 if the appraisal came in short. We were bridesmaids again and someone beat us out by waiving the appraisal contingency all together.
Back to the search and a promising townhouse popped up for $205,000. I reached out to the listing agent and she was of the same mind as I: Openly communicated, willing to tell us how many offers there were AND what was the one to beat. They had no offers, YET, so I booked an appointment and my clients and I did a 3 way FaceTime call (I learned a new trick 😏) and we walked through the property. The neighborhood was just southeast of the condo they lost out on but closer to downtown and the light rail. It’s in a neighborhood of older single family homes, duplexes, condos and town homes. This one is slump block construction, a true brick sh#t house which is fantastic for our climate.
We were pleasantly surprised to see how nice it was. It had new Pella windows, 20 inch tile, updated bathrooms and definitely well cared for. The big bonus was the enclosed back patio area which was partially open to the air but screened in. You see there will be an English Mastiff living there as well so this was ideal. NOW TO GET THIS UNDER CONTRACT!
After the showing I called the listing agent to see what was cooking on this one and it was hot. She had a couple offers already with more to come. They were cutting off showings at noon the next day and would look at offers in the evening. I asked if I could check in with her in the afternoon and see where they were at as we were definitely interested in submitting an offer.
We pulled comps and felt that this one was underpriced which is not uncommon in this market. Later we would find out they wanted to put an offer on a property so the listing agent purposely underpriced it by about $10K to drum up more offers in a short timeframe. More offers drives the price up and gets it under contract quickly. This is a tactic I’ve used as it works very well.
Based on the comparable properties pulled we felt that this unit would easily appraise out at $225-230K. You could though have a conservative appraiser and it appraises much lower however sometimes you have to take a leap of faith. Not much of a leap though because if you went outside of this particular complex there was a $247K sale and within the complex was a slightly larger unit with an updated kitchen pending with a list price of $242K. Still a gamble though but if that pending sale closed near asking we were within $5-10K.
I called in the afternoon and was told they had offers as high as $250K however that offer was only guaranteeing $10K over appraisal. Another offer which was $235K waiving the appraisal contingency was the other top one. My clients and I spoke and the listing agent agreed to tell me exactly what she had on the table 30 minutes prior to the deadline. I called back and asked if $245,000 waiving appraisal and AS-IS would get it and she said it was a high probability. So thats what we did.
Later that evening I got a call form the listing agent that we had beat out 10 other offers. She made a point in saying that another reason we got it and they didn’t counter the top 3 in another round was that I was very communicative, open, obviously knew what I was doing and had a positive attitude. She and her client felt that because of the way we had conducted ourselves up until that point that we would get it closed without a bunch of drama.
I know, I know, you’ve heard this before however it has to be said again because we keep hearing it: Whom you work with matters. The REALTOR® you choose to work with WILL make a difference in whether you can get a property as a buyer and if you’re selling it will be the difference in getting the right buyer at the highest price and terms. Period!
Done with the self promotion…On to the transaction
Our strategy worked and we got the townhouse under contract. We had 10 days for inspection so we ordered a fast tracked appraisal that would get back to us prior to our 10 days. This costs a little more but well worth it as you could cancel the contract due to the inspection. We then did an HVAC inspection as the system was 9 years old and waited to do the General Inspection until day 8. The HVAC inspection yielded a system in good shape but needed a new fan motor and capacitor which was $620.
Our clients flew in for the general home inspection and saw it for the first time. They came in a day early to drive the area and check it out. They loved it! It was perfect and the home inspection only yielded a couple items that were not a major concern. The unit looked like it had been well cared for and it was.
More good news! We got the appraisal back and it was at $237,000 so the buyer would only have to make up an $8,000 difference in cash at closing. At our current rate thats 1.7 months of prepaid appreciation.
So to sum up, we were able to get a townhouse within 15 minutes of ASU that was listed for $205,000 competing with 10 other offers. We had to go in $40,000 over asking at $245,000 BUT comps showed it was worth most likely $230K+, it appraised for $237K. We waived the appraisal contingency AND going in promised not to ask for any repairs.
This market isn’t for every buyer. It takes a bit more work, time and patience however you can find and get a property if you’re willing to do what it takes within reason.
I hope you found this Information useful. If you know of someone needing our expertise we would be happy to walk them through the ins and outs of this market.