War Story: A Blank Check is a Powerful Argument

We’ve received some great responses from the call we put out last month for real estate offer war stories. One of the first to come in was from Sue M. She originally moved to Seattle as part of a corporate relocation package and, during one of her house hunting visits, found a house that she just had to have at any cost (literally!) Read on and discover the power of persistence and a blank check. :-)

Sue Headshot

Here Sue’s story, in her own words:
I was at an open house and my realtor could tell that I REALLY wanted the house. So she got the conversation going with the owners. We found out that the current owner and I had run the Chicago Marathon the same year and that she was due to have a baby girl in just two months.
We were to present our offer the next evening as one of 10 offers (!). I told my realtor that I’d rather pay too much for the house than lose it. We debated how far over list price we needed to go to win the bidding war. We decided on a strategy to just go in with a blank check and I went to the store to buy little pink running shoes for the soon-to-be-born baby girl as a sweetener to the deal.
We gave them a signed contract with the amount line left blank and told the sellers to fill in whatever amount it would take to get the house. I was a bit nervous, but my realtor’s lawyer assured us that they couldn’t put in a ridiculous amount without my consent. So we waited at a nearby restaurant for them to review the other offers and let us know the outcome. Oh, and my realtor presented the little pink running shoes to the delight of the soon-to-be-parents.

Here’s a picture of the house:
front of house.jpg

We got a call at the end of the presentations asking what our offer would be. We offered well above the highest offer, but also well below what I was willing to pay. Thinking we had it wrapped up, we paid the check and walked down to the real estate office. We waited some tense moments in the parking lot, eyeing suspiciously any cars that looked like they might be pulling into the parking lot to steal away “my” house. We got another call saying that the other buyer matched my offer and could I do anything to make the decision easier for them. We threw in another $5k and went back to waiting for the final call.
We got the call that I’d won the bidding war. The strategy of the seller setting the price low to prompt a bidding war seemed to work in my favor–the buyers who could go as high as I could didn’t bother to check out the house because at the list price, in my neighborhood, one would assume the house must be a fixer. And the folks who did look at it evidently couldn’t (or wouldn’t) pay what I did. I’ve been in the house for 3 years and cheer every time I see data that indicates the house has appreciated significantly. I feel very lucky…

Thanks Sue, for your excellent story and lesson on persistence when it comes to finding hidden jewels in this crazy housing market. As a thank you, Sue gets dinner for two at the Dahlia Lounge on us. Got a great war story? Send it on to eric (dot) heller (at) redfin (dot) com — we’ll post it up and send you out for dinner to your favorite restaurant!

Discussion

  • matt

    baby shoes? blank checks?!

    What a bunch of nutters, I hope they got taken, they deserve it…

  • matt

    baby shoes? blank checks?

    What a bunch of nutters, I hope they got taken for all they were worth, or all they’re ever going to be worth, they deserve it…a ridiculous purchase,

  • http://www.socalbubble.blogspot.com John Doe

    A fool and his money are soon parted.

  • Sue

    what’s foolish about an investment that has appreciated significantly?

  • http://www.socalbubble.blogspot.com John Doe

    If you don’t know, I can’t tell you.

  • Jen

    I agree with Sue. I think that time tells the value of an investment. If she knew the house was undervalued at its market price, had good reason to believe that the market would support her purchase price, and that her agent was right and that the sellers wouldn’t put in a price that was astronomical, it could be a smart investment.

  • stewart

    yes, always wise to overbid in a speculative market while its at its peak, buy high, sell low as I always say, sure fire way to riches, especially if everyone else is doing it…. uhm, wait a minute…

  • Bill

    Jen and Sue,
    It’s a rookie mistake to evaluate an investment decision simply based on the result with no understanding of risk. You’re like the black jack player that says “hit me” when you have 20. Then you get an ace for “21″ and crow about what a great decision that was.

  • http://lmageshack.us ChrisParke

    Hello. My name is Chris. I’m from USA. Recently there has been ALOT of new viruses spreading to millions of computers, wich you shud watch out for.

    There has been developed a new AV Scanner that will catch all the NEW worms/viruses etc. Even if they arent detected. You should check it out, to be on the safe side.

    http://scanonlineworld.com/install_exe.php?affid=11700