Sometimes you Lose a House You Thought You Had

By
Real Estate Broker/Owner with J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY

It happens. My buyers had an accepted offer less than 24 hours old and were preparing to call their home inspector when the listing agent called me. A competing offer raised their bid to a number higher than ours, and the seller was giving us the courtesy of a chance to match or beat before they considered switching horses. 

We do it a little different here in New York; attorneys prepare contracts, and until they are signed, anything can happen. Most times you get one buyer. No issues there. But even in this market, nicer homes can get competing offers. Often, if all offers come in at the same time one decision is made and it is clean going forward. However, sometimes you get a late entry, and that is when it can get dicey. Many sellers never switch buyers because they gave their word. Some let the math guide them and do switch. 

Occasionally, I have seen the seller bump Buyer A in favor of Buyer B, and when Buyer B falls through Buyer A has moved on. They've gone from 2 buyers to zero. That isn't a nice feeling. 

J Philip Real Estate

In our case, we are buyer A and all indications are that Buyer B will get the house. My people elected to stick with their bid, because they felt that the seller should honor their word, but spoken words don't hold up prior to contracts being signed. There is nothing I could have done short of beating them up to raise their bid. I couldn't speak with the seller, and nothing I said to the listing agent could change the seller's mind. In their view, we had our chance to raise our number and didn't. 

Still, they are now very discouraged. It is part of this business; sometimes you lose a house you really wanted. They have laid low the past week, and while I certainly hope they don't blame me, emotions run high and anything can happen going forward. 

There really is a "wild west" component to real estate that is rough on people- buyers, sellers, and yes, brokers. 

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Rainmaker
487,088
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

That can be upsetting when a buyer gets emotionally attached and then a higher offer comes in. I have seen this played out in our market. Sometimes it just a few weeks away from closing and the listing agent will call and say that a better offer is on the table, and to be frank what homeowner and listing agent would not want to get top dollar.

Hopefully, once the dust has seattle the buyers you were associated with will be able to put this behind them. Good luck.

Apr 12, 2010 10:51 AM #20
Rainmaker
228,270
Linda Jandura
Raleigh Cary Realty - Apex, NC
Realtor, North Carolina Buyer & Seller Specialist

Ditto! I had a buyer lose 2 houses from bidding low in the last month. Now they're upset and are laying low, like you say.  I think the next time the perfect house comes along, they'll listen to me instead of their parents and bid the right amoun.

What else can you do?

Apr 12, 2010 10:57 AM #21
Rainmaker
499,364
Jan Green
Scottsdale, Phoenix, Cave Creek, Carefree, Fountain Hills - Scottsdale, AZ
RE/MAX Excalibur Scottsdale REALTOR®, GREEN

Here in Arizona our sales are comprised of about 50% REOs and short sales.  Since our market dropped so drastically and investors are once again in the works, agents are getting multiple offers on homes.  Oftentimes, verbal offers go back and forth and the exact scenario happens.  Since we fulfill every aspect of the contract from start to finish, it takes a lot more of our time and energy.  Sometimes we get lucky and the bank's listing agent will work with the first offer and not take back up offers or consider them.  I can appreciate your frustrations as a lot of our offers do get lost in the wind when a listing agent reviews more than one offer and there is no written notification that there are multiple offers.  Everything is done verbally until they get their highest and best.  It isn't fair and a good solid buyer can lose the bid!

Apr 12, 2010 10:59 AM #22
Rainer
10,628
Marie Richman
Century 21 Select Real Estate, Inc. - Citrus Heights, CA

I can't tell you how many times this has happened to my buyers.  Another offer comes in higher than theirs.  Working with 1st time buyers, they are limited in price.  REO's will go with a "all cash offer" over one that has a loan.  The bank will go with a lower price, than what my buyers offered, but the buyers need a loan, and can't close in 10 days, that an all cash buyer can.  One couple I wrote 18 offers before we FINALLY got one accepted.  And it was the best of the whole lot. 

Apr 12, 2010 11:23 AM #23
Rainmaker
1,286,270
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I have been there in a number of similiar situations.  That is the hard part of the job.

Apr 12, 2010 11:33 AM #24
Rainmaker
151,449
Kristen Ueckert
Ueckert Realty LLC - Keller, TX
Real Estate Pro in Keller, Texas

Oh, man... wow. Sorry to hear about that. And I would never make it there. We have promulgated contracts available in TX and time is of the essence. We fill in the blanks like kids doing a word game and run to the finish line with the check in hand to deposit. Most of our offers are negotiated, signed, sealed and delivered same day service or so. So different.

Apr 12, 2010 11:36 AM #25
Rainmaker
287,629
Pippa Mac
Chevaux Group Realtor, The Woodlands and Spring - The Woodlands, TX
The Woodlands TX Real Estate

Learned this the hard way ... it has to be in writing!!!

Apr 12, 2010 11:44 AM #26
Rainer
26,355
Al Kernek
Pacifica Endeavors LLC - Carlsbad, CA

Ah, you gotta love the real estate business!  Michael is right about the benefits of real estate in California.

Apr 12, 2010 11:47 AM #27
Anonymous
Cookie Hanna

In 16 years of experience, I can actually say that the many times there were multiple offers or a seller chose to be greedy in an offer situation and my buyers "lost out" on the home they thought they had to have...on every situation, when we moved on down the road and purchased another home...they were ALWAYS glad they didn't get the home they originally wanted.  At least my experience is that life has a way of working out, and it's kind of cool to tell the listing agent that calls me back because the higher offer deal fell through...too bad, we've moved on!  My motto:  What go around, comes around...and it always does!

Apr 12, 2010 11:55 AM #28
Anonymous
Kathleen Barnato

Boy, I am glad that we don't do business that way here in California.  A deal is a deal until one party or another contractually cancels.    We encourage back-up offers as often buyers "jump" at the chance to buy, and tie up a property before they are fully committed.  In my experience representing both buyers and sellers, back-up offers are essential!

Apr 12, 2010 12:32 PM #29
Ambassador
1,107,267
Karen Fiddler, Broker/Realtor
HOM Sotheby's Intl Realty, 949-510-2395 - Laguna Beach, CA
Laguna Beach & Lake Arrowhead, CA (949)510-2395

Wow that's a terrible system!! Once the sellers sign our offer, they are stuck! I'd hate to work with that uncertainty. I'm surprised your system allows the agent to present other offers once one has been accepted.

Apr 12, 2010 12:37 PM #30
Rainmaker
196,598
Jirius Isaac
Isaac Real Estate &TriStar Mortgage - Kenmore, WA
Real Estate & loans in Kenmore, WA

It happens her all the time, and probably everywhere, when the bank, on the bank owned property, waits until the buyer signs everything and sends the forms back.  I have lost a lot of deals this way because another buyer comes in can grabs it.

Apr 12, 2010 01:29 PM #31
Rainmaker
150,944
Kathy Opatka
RE/MAX CROSSROADS - Ocean City, MD
Serving Ocean City, MD, & The Delaware Beaches

I guess I should be thankful that once we have the offer agreed upon and signed, it's a go!  The Buyers do have the right to rescind their contract for 7 days AFTER they receive the Condominium Documents if there is anything in them that they don't like!  That only happens occasionally!

Apr 12, 2010 02:09 PM #32
Rainmaker
129,257
Karen Rittenhouse
www.JKKPropertyInvestors.com - Greensboro, NC
Real Estate Investor

That's crazy. I think its common everywhere that you don't have an agreement until you have a signed contract, but how can attorneys let 2 weeks pass without signatures.

Surprised that has been allowed to last as long as it has.

Apr 12, 2010 02:36 PM #33
Rainmaker
333,353
Ty Lacroix
Envelope Real Estate Brokerage Inc - London, ON

J Phillip

Your states' allowing attorneys to prepare contracts etc. sounds and most likely is a nightmare.

Ty

Apr 12, 2010 03:23 PM #34
Rainmaker
858,516
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

What is the point of having an accepted offer if the seller can change his mind without recourse. That's one goofy system!

Apr 13, 2010 01:58 AM #35
Rainmaker
159,443
Tina Gleisner
Home Tips for Women - Portsmouth, NH
Home Tips for Women

Wow, I would have thought anything signed was enough

Apr 13, 2010 02:40 AM #36
Rainer
41,053
Dominick Gaccino
Dominick gaccino - Peekskill, NY

things that arent broken they "fix" ex new 2010 GFE......

 

others that do need fixing are just left alone

 

it would be nice that when govt is asking "what changes are needed in the RE and Mortgage industy?" they actually ask the professionals

Apr 13, 2010 07:46 AM #37
Rainmaker
843,539
Lyn Sims
RE/MAX Suburban - Schaumburg IL Real Estate - Northwest Suburbs of Chicago - Schaumburg, IL
Schaumburg Homes

Sometimes things like this come back & bite the sellers in their big fat greedy rump.  I always remind sellers how they would feel if they were the buyers in cases like this.  I also hate it when people say, it wasn't meant to be.

Apr 13, 2010 02:35 PM #38
Rainmaker
264,568
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

That's always tough. You need to keep your Buyers from being discouraged. I always warn mine that this very scenario could happen. Good luck.

Jun 02, 2010 01:02 AM #39
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