Multiple offers? Now?

“Why is NAR worried about changing the rules for multiple offers?  Nobody sees multiple offers in a market like this one.” 

Those who make this comment start with a couple of assumptions: First, that the real estate market is slowing or declining pretty much everywhere. (I won’t address this one, but anyone who has taken PAR spokesperson training can certainly tell you that you can’t jump on numbers from the so-called “national real estate market” to make assumptions about your local market in PA.) And second, that in a slow or down market you can’t find more than one potential buyer for a home.

Hmmm…

In the boom market there were brokers listing properties below (sometimes well below) the price they were expected to sell for. Why? As a strategy to draw attention to a perceived bargain, then get multiple bidders to push up the price.

The January issue of NAR’s REALTOR^® Magazine has an article called “Doing Business in 2009” that provides some economic analysis and various marketing tips.

To help generate sales in a slower market, NAR suggests focusing on areas that have greater than average price drops in order to ignite a buyer’s bargain hunter instincts. Same idea – no matter the market conditions, if you’re listing a “bargain” compared to other homes, you’ll attract more potential buyers and more offers. The article cites a practitioner who has focused on the hardest hit areas in his market and has succeeded in securing multiple offers even among dramatic overall price drops. While his sellers may still lose money on their homes, I’m guessing they’re better off with multiple offers than without. So maybe he’s getting fewer deals with multiple offers than he used to, and maybe those with multiples have only two today instead of eight yesterday, but is that so bad?

Heck, if you can find this sweet spot for your listings, maybe you’ll have a chance to see a copy of the PAR Price Escalation Addendum (Form PEA) out in the wild….

But seriously, we know from the statistics that most markets in PA are holding up far better than many markets across the country, so you must be doing something to keep sales going. What are YOU doing to keep selling – and are you getting multiple offers?

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Tags: brokers, multiple, offers

This entry was posted on Wednesday, January 7th, 2009 at 8:58 am and is filed under Economics, NAR. You can follow any responses to this entry through the RSS 2.0 feed.