The real estate market we’re in right now is extremely lucrative for sellers and sometimes equally frustrating for buyers who really want to buy a house right now.
On one listing, we went into escrow with a full price offer from a buyer who was super excited about the house, the buyer did inspections with the unrealistic expectation that absolutely no repairs whatsoever would come up, and then the buyer got scared and canceled. There were multiple new full price buyers waiting, super excited that the house was available again.
On another listing, we went into escrow $250,000 over the asking price. On day 11 of the 10 day inspection period, the buyers submitted a request for $350,000 off the agreed price; they explained their $350,000 number by estimating very roughly $125,000 for items noted in the general inspection report, $90,000 to improve drainage by ripping out and later replacing all concrete in the driveway + walkway + backyard to put more drain pipes in the soil underneath, and then figuring the most expensive option from every alternative on the remaining reports. We canceled that escrow immediately, we shared the dropbox link to the reports we received, and there were 3 buyers fighting to get the accepted offer for the same $250,000 over the asking price. I loved the owner’s comment wondering how the first agent didn’t know the obvious, that their clear strategy of going into escrow at a high price that they so obviously planned to renegotiate down to a lower price after their inspection period would be a complete waste of their time and ours, knowing how we run our listings and we represent our sellers.
On a third listing, we have to choose from 3 buyers; one is all cash quick close, $100,000+ over the asking price, a second is $200,000+ over the asking price and a 21 day close because they’re already underwritten by their lender, and a third has an escalation clause that says they’d be willing to go $300,000 over the asking price as long as they see proof that their final offer is no higher than $25,000 more than the next best offer. We’re leaning toward going with the second offer because: 1) I hate escalation clauses. I think buyers should commit to the number they’re comfortable paying for the house. Buyers can think hard and arrive at their committed number by deciding that if they get to buy the house for their number they’re happy. And if they lose because a different buyer was willing to pay more, then they’re happy too because the end price was more than they were comfortable to pay. An escalation clause says that the buyer wishes they could pay a lower price but if they were forced to, they’d pay more. It feels un-committed to me and more in the spirit of winning a competition than committing to a price they’d be happy to pay to buy the house. 2) With 2 different houses going in and out and then in escrow this week, I tried to comprehensively vet all 3 buyers and choose the one that seemed most likely to stick with the transaction to the end. The second buyers felt to me most likely to be those people. 3) The second buyers sent the sellers a lovely picture of their family, with a warm letter, and their offer was followed up with several friendly phone calls from their sweet agent. Sincerity and sharing with the sellers wins these competitions very often and it will likely do the same in this case too. Sweet good people with a 21 day escrow period and the highest offer not considering the escalation clause feels like a good place to open escrow first.
So many people call to ask about improvements and renovations that will yield a return on resale. The number one question is about adding an ADU. It might still be too soon to tell because the ADU laws are newer, but so far, from what I see, owners are super excited to build ADU’s but buyers aren’t necessarily as excited to buy properties with ADU’s and I’m not convinced there’s always ROI on resale from ADU’s on single family houses. We’re selling houses without ADU’s for the same price as houses with ADU’s and I’m not positive that an ADU brings a significant increase in price or value on every single family house. Of course it’s always case specific, but my advice would be to build an ADU if you’ll enjoy it personally and not specifically for resale. For those thinking to add solar panels with a long committed lease, buyers do NOT like assuming solar panel leases. We consistently get asked for ways to cut the solar lease and make the panels go away. Buyers do love swimming pools and those absolutely increase value; there’s always ROI in adding a pool for resale. My favorite part of my job (or one of my favorite parts :)) is advising owners on how to add significant value right before listing for sale. Right now we’re taking the time to show our raw listings to real buyers before we add value so that we can accurately assess and track the cost + return on our pre listing prep. We’re finding, as we know, that we’re adding extremely significant value to the owners post prep. It makes me over-the-moon excited each time we learn how much value we added for our clients!
I’m excited that our listing on Clark sold right away! It was on the market with a different agent for 92 days with not a single offer right before our listing. As soon as we listed it, we got an offer over the asking price with lovely buyers and a lovely agent, and the seller was fascinated that it all worked like clockwork and it is set to close this week. It’s fun to work for fascinated sellers!
The highlight of my week was hands down the appointments I had with 2 different buyers showing them houses! I always love a challenge, and working with people whose company I especially enjoy as they navigate buying a home that feels just right to them is exhilarating and fascinating to me! I find the process so fun!
Have an awesome Superbowl weekend! I’m so excited for my birthday week ahead!