Sylvia and I have been hopping busy the past couple of weeks, and we’re starting to see a lot of multiple offers again, and it feels like the Selling Season is ramping up as it did about this time last year in Austin. Here is a look at the last several deals we’ve written for Buyers this past week:
• We wrote a deal two days ago in which the agent had 5 offers. This was in Area 10S (old Austin MLS Area 10 is now split into North/South, thus area 10S and 10N replace old area 10). In order to win, our buyers went $2,100 over list price, offered all cash, offered a closing date of Seller’s choosing, and of course we wrote an impeccable offer that was free of mistakes or errors, which the Seller was able to sign without counter-offering. The offer was also accompanied by a letter outlining what the Buyer felt were the merits of the home and their offer.
• Another one last week was multiple offers just a day or two on the market in Austin MLS Area SWE (old Austin MLS Area SW is now split into East/West, thus area SWE and SWW replace old area SW). This one our Buyer got with a full price offer, again very cleanly written with no nonsense. I can’t stress how important it is, if you’re a Buyer going after a hot listing, that you and your agent know how to write a no-nonsense offer to which the Seller can easily say “yes” and sign off as-is. It’s not always the highest price that wins multiple offers, but the best looking offer considering other factors in addition to price. Sending a sloppy offer with missing initials, missing addendums, sloppy writing, no pre-approval letter, no cover letter to the agent and sellers, etc., diminish the attractiveness of your offer.
• Another one was again multiple offers the second day on the market in MLS Area W, west Austin. This listing, we felt, was under priced and we anticipated multiple offers over the list price. Our offer won by utilizing an escalation clause which stated “in the event Seller receives multiple verifiable offers, Buyer will increase this offer price by $2,000 up to a maximum of $xxx,xxx.” The agent called and said there were indeed multiple offers, and that ours was not the highest, and asked if we did indeed want to raise our offer price, which we did, and our offer won.
• A 4th deal we wrote last week was on a listing that was somewhat over-priced, and not in multiple offers, but the Seller held out for a price which was in fact slightly higher that the value our CMA indicated. But given that there was not a suitable “second choice” currently on the market, and our buyer really liked the home, we were able to make the deal work.
If the activity we’ve been seeing the past couple of weeks, and the number of web inquiries and new buyers we’re taking on is any indication, 2007 is going to be another very busy year in Real Estate sales for Austin. Prices appreciated in Austin more than 10% in 2006, and I won’t be surprised if that happens again in 2007 in the better areas (i.e. – not areas that are affected by cheap new-home sales.)
This is good news for Sellers, but not necessarily bad news for Buyers. As a Buyer, you’ll pay more for your home in Austin than you would have last year, but Austin still has, in my opinion, a good 5 to 7 year run ahead of us. Our economy is humming. Our home prices are still favorable given that we have 4 years of ZERO appreciation from 2002 through 2004, and just meager appreciation in 2005. The price gains of 2006 are in part pent up gains that would normally have already occurred had we not suffered the tech bust in 2001.
So 2007 is still going to be a great year to get out and find and a great home in Austin – even if you have to fight against multiple offers to get the one you (and others) really want.