57% Of Offers Are On Homes With Multiple Bids

by Redfin Blogger | 9 Comments

In June, our Southern California agents presented 140 offers to listing agents and 80 of those, or 57%, were on homes with at least one other offer, down from 65% in May.

Joyti Goundar, one of our all-star agents in Southern California worked on 39 offers in June and 30 of them were on listings with multiple offers. “Things are so competitive right now, many listings are getting 5 – 10 offers so you have to put your best foot forward and make a strong offer,” says Joyti.

One of Joyti’s clients recently bought a home in Pasadena that had 16 other offers. To show they were serious about buying the home, her clients’ offer included a 40% down payment, 3% earnest money, no appraisal contingency and an inspection contingency reduced from 17 to 10 days.

However, sometimes putting their best foot forward isn’t enough. Another one of Joyti’s clients made an offer over listing price, with a 25% down payment and an inspection contingency reduced from 17 to 10 days. The sellers rejected the offer. There were 18 offers and the sellers were countering with the top nine.

A lot of this competition is due to families with school-aged kids trying to buy in between school years. “The summer market is always busy because parents want to buy and get settled before the school year begins,” says Joyti.

Where are you seeing listings with multiple offers?

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  • Daphne Doesn’t

    As Edmund Burke said, “The credulity of the dupes is as inexhaustible as the invention of the knaves”.

    Come Oct., the housing market is going to be looking mighty bleak. Increased foreclosures and more unemployment.

    Don’t let these dupes mislead you into thinking we are anywhere near the bottom. Read Nouriel Roubini, John Mauldin and others who say housing will not be recovering any time soon. For that to happen, we need jobs and credit. This is a post-bubble bubble–as the article says, a seasonal aberration.

  • cahotbabe

    in the Orange County areas such as Anaheim, Buena Park, Stanton it is the same situation. I am looking at townhomnes/SFR between the $200k to $300K range, I’ve offered $45,000 above the asking with 5% ernest money, FHA Loan, inspection contingency reduced to 5 days…i still didn’t get the property. the seller wanted to remove the appraisal contingency which we feel that in this declining market would put me in a difficult situation…

  • Raffi

    Exactly, a post-bubble bubble. The bubble was so massive and unprecedented, that 2 things have happened – 1) a level of pent up demand by responsible people who did not want to jump in and buy something they could not afford and 2) people began to believe that property must be worth a lot more than it used to be, that it can never go back down to old levels again.

    This mini-post-bubble is a convergence of these two groups. People who are sick of waiting and think this is it, prices can’t go down much more. But with historic highs in unemployment, and mortgages/credit about as hard to get as it ever has been for most, AND prices still well above their pre-bubble lows, it seems inevitable that they will still drop significantly. The impetus may well be the Alt-A and option ARM resets that will begin in earnest later this year. Read doctorhousingbubble for an excellent post on this.

    If you wait, you’ll be able to pick up nearly two houses for the price of one :-)

  • Emil

    Raffi’s right. However, I don’t see home prices dropping fast. It will take a few years. The thing is that sellers want to minimize their losses, so they lower the price just a little bit and wait out to see if anybody bites. If nobody does, they lower it a bit more, etc. They do this until they realize that it’s not worth selling, or until they are forced to sell by dropping to below average sale price at that moment in time. The people who are forced to sell, but missed to do so in time will face foreclosure. At that point, the bank takes over and sells again trying to minimize its losses (lowering a bit at a time)…

    Be patient, save and do the right move once prices stabilize. There’s no need to lose hundreds of thousands of dollars just because of becoming desperate about owning a house.

  • John

    I was very impressed with the first email I got from Redfin when I Joined this network, that was about the market condition. But now I am a little nervous after reading Refin’s agent post. Jothi says “Things are so competitive right now” this is BS. I fired my previous agent because he was lying like Jothy. He was telling me it is seller market, and prices are going up very fast, and I have to put my best foot forward by offer a lot more than the listing price, etc.

    I feel sorry for the guy who put his best foot forward.

    Other than that I love Redfin. It is very easy to use. Very informative website. I like the monthly update. But I want agent who is honest.

  • Mike

    The plane is about to take off for the real estate market again and all those who are just sitting on the sideline will be left again. That is why they say only the people with guts/nerve get the gravy because others just want to keep on talking about the things and never do any action at all. I bet you even if price will drop by half at this point, all of the pessimist out there will just keep on saying it will drop again by another half. It’s all pure talk! Grow up!

  • Diaphne Down

    Mike says “The plane is about to take off for the real estate market again and all those who are just sitting on the sideline will be left again.”

    Don’t forget Edmund Burke, folks: “The credulity of the dupes is as inexhaustible as the invention of the knaves.”

    There is absolutely no foundation for Mike’s comment. Do we have more jobs? Do we have easy credit again, as during the bubble? If not, where are the buyers coming from? What turned the tide? Repeat after me: The credulity of the dupes…

  • Diaphne THINKS

    Deutsche Bank analyst (8.10.09) says by the end of next year, 50% of all mortgages will be underwater.

    What do you think that will do to prices, multiple bidders?

    And Bob Prechter (8.11.09): Inflation Not a Problem, “Deflationary Depression” in Our Future, Prechter Says
    Posted Aug 11, 2009 08:30am EDT by Peter Gorenstein in Investing, Commodities, Recession, Banking, Housing

    Use your heads–what possibly could have turned this financial debacle around? We’ve had a seasonal blip. Prices will be heading down for the next year at least, and will not rise for many years–until jobs and credit flow in.

  • http://www.edhardyworld.co.uk ed hardy

    Other than that I love Redfin. It is very easy to use. Very informative website. I like the monthly update. But I want agent who is honest.