MAR – Primer on Multiple Offers
As the housing market recovers, more and more buyers are finding themselves in a situation where they are competing with one or more other buyers. Understandably, in this situation, the unsuccessful buyers are disappointed and often angry. Many times, the unsuccessful buyers’ anger is directed at the Realtor who helped them try to buy the home, and their anger is misplaced.
The only law governing the presentation of offers is a rule that requires a real estate licensee to forward all offers he or she receives to the seller. R339.22307. After the offers are delivered, there is no requirement that a seller consider them in any particular order or that the seller reject the “first” offer prior to considering a “second” offer. Additionally, there is no requirement that a seller reject an offer in writing or even acknowledge receipt of the offer. A seller who receives an offer can accept, reject or counter that offer. In addition, the seller can choose to do nothing. A seller can choose to “sit” on an offer while waiting for a second offer, or not. A buyer can request that a seller respond in writing, however, the seller has no legal obligation to do so. Further, a Realtor acting on behalf of the buyer is generally prohibited from contacting directly any seller who is represented by a Realtor.
When considering multiple offers, there is no requirement that a seller treat each potential buyer equally or even fairly. A seller can even discriminate, so long as the seller does not discriminate on the basis of religion, race, color, national origin, age, sex, disability or familial or marital status. A seller is not required to take the highest offer. A seller can decide to accept a lower offer because it is a cash offer or because that particular buyer has a preapproval letter from a lender. A seller could even accept a lower offer because she knew that the offer was from an avid gardener and believed that he would take good care of the garden she had put so much time into over the years.
That being said, it is certainly true that most sellers will in fact accept the highest price offer. In fact, REALTORS® and others in the real estate business often instruct buyers in this situation to present their “highest and best.” To some buyers, this term suggests that this is in fact an auction-type situation in which the terms of the offers must be kept confidential and the highest offer must be accepted. This is simply not true. As stated above, the seller can accept any offer. The seller can disclose the amount of the other offers to none, some or all of the other potential buyers. A seller can offer one buyer an opportunity to submit another bid, without offering the other buyers a similar opportunity.
Buyers in a multiple offer situation should certainly put forward their “highest and best.” While there is no way for a buyer to guaranty that his offer will be the one selected, as a general rule, sellers prefer clean offers with few contingencies, short timeframes and evidence of ability to perform.
Finally, when competing with other potential offers, buyers should keep in mind the following rules of law relating to offers and acceptance
1. An offer cannot be accepted orally. Even if you are advised via telephone that your offer is the one that has been accepted by the seller, you do not have a binding contract until the written acceptance is delivered to you (or to your real estate agent).
2. Generally, an offer or counteroffer can be revoked at any time before it is accepted. This is true even if the offer contains a stated expiration date.
3. While offers and acceptances relating to the purchase of real estate must be in writing, an offer can be revoked orally.
4. A buyer cannot simultaneously accept and materially change a seller’s counteroffer. If, for example, you “accept” the seller’s counteroffer, but add a provision whereby the sellers are required to throw in their pool table, you have in fact “countered” the seller’s counteroffer.
5. Once an offer is countered, it has been rejected. So, in the above example, if the sellers do not agree to throw in their pool table, you cannot go back and “accept” the seller’s original counteroffer.
6. A seller is not required to accept a full price and terms offer. A list price is not an “offer” that can be accepted by the buyer.
Buyers are cautioned not to get too caught up in the bidding process. For many of us, a home purchase is the biggest financial purchase we will make in our lifetime. While a waiver of an inspection contingency may make it more likely that you will be the successful “bidder,” it is certainly a risky course of action. Remember that there are many other houses out there. You will fall in love again.
Home Prices in 2012: Best Year-on-Year Gain in Six Years
Posted By Susanne On February 7, 2013 @ 4:09 pm In Business Outlook,Consumer News and Advice,Finance and Economy,Real Estate Information,Real Estate Trends,Today's Marketplace,Today's Top Story | Comments Disabled
CoreLogic®, a leading residential property information, analytics and services provider, recently released its December CoreLogic HPI® report. Home prices nationwide, including distressed sales, increased on a year-over-year basis by 8.3 percent in December 2012 compared to December 2011. This change represents the biggest increase since May 2006 and the 10th consecutive monthly increase in home prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 0.4 percent in December 2012 compared to November 2012. The HPI analysis shows that all but four states are experiencing year-over-year price gains.
Excluding distressed sales, home prices increased on a year-over-year basis by 7.5 percent in December 2012 compared to December 2011. On a month-over-month basis, excluding distressed sales, home prices increased 0.9 percent in December 2012 compared to November 2012. Distressed sales include short sales and real estate owned (REO) transactions.
The CoreLogic Pending HPI indicates that January 2013 home prices, including distressed sales, are expected to rise by 7.9 percent on a year-over-year basis from January 2012 and fall by 1 percent on a month-over-month basis from December 2012, reflecting a seasonal winter slowdown. Excluding distressed sales, January 2013 house prices are poised to rise 8.6 percent year over year from January 2012 and by 0.7 percent month over month from December 2012. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.
December marked 10 consecutive months of year-over-year home price improvements, and the strongest growth since the height of the last housing boom more than six years ago, says Mark Fleming, chief economist for CoreLogic. We expect price growth to continue in January as our Pending HPI shows strong year-over-year appreciation.
We are heading into 2013 with home prices on the rebound, said Anand Nallathambi, president and CEO of CoreLogic. The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery..
Highlights as of December 2012:
Including distressed sales, the five states with the highest home price appreciation were: Arizona (+20.2 percent), Nevada (+15.3 percent), Idaho (+14.6 percent), California (+12.6 percent) and Hawaii (+12.5 percent).
Including distressed sales, this month only four states posted home price depreciation: Delaware (-3.4 percent), Illinois (-2.7 percent), New Jersey (-0.9 percent) and Pennsylvania (-0.5 percent).
Excluding distressed sales, the five states with the highest home price appreciation were: Arizona (+16.4 percent), Nevada (+14.7 percent), California (+12.8 percent), Hawaii (+11.7 percent) and North Dakota (+10.8 percent).
Excluding distressed sales, this month only three states posted home price depreciation: Delaware (-1.9 percent), Alabama (-1.0 percent) and New Jersey (-0.5 percent).
Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2012) was -26.9 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.8 percent.
The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-52.4 percent), Florida (-43.5 percent), Arizona (-39.8 percent), Michigan (-36.5 percent) and California (-35.4 percent).
Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, only 16 are showing year-over-year declines in November, two fewer than in November.
For more information, visit www.corelogic.com .
Detroit area home sales were up 10.7 percent in January over the same month a year ago, according to data released today by Farmington Hills-based Realcomp II Ltd.
Home sales in Wayne, Oakland, Macomb and Livingston counties rose from 3,495 in January 2012 to 3,869 last month, Realcomp reported.
The largest increase was a 29.3 percent jump in Livingston County. Also posting gains were Oakland (13.7 percent), Macomb (4.4 percent) and Wayne counties (9.9 percent).
In addition, the median home sale price in those four counties increased by 26.7 percent, from $63,150 in January 2012 to $80,000 last month.
Home sale prices in Wayne County rose by 28.6 percent, while home sale prices in Oakland and Macomb counties increased by 32 percent and 15.4 percent, respectively.
Prices in the Livingston County market remained flat.
The total number of homes on the market in those four counties also fell, from 19,947 in January 2012 to 15,537 last month, a 22.1 percent drop.
Karen Kage, CEO of Realcomp, said low inventory has driven the sales prices up.
"Inventory levels are lower than I've ever seen them, and they are very low all over the country," she said.
There was a 21.7 percent reduction in home inventory in Wayne County, a 25 percent drop in Oakland County, a 17.9 percent drop in Macomb County and a 22 percent drop in inventory in Livingston County, according to Realcomp.
Kirk Pinho: (313) 446-0412, firstname.lastname@example.org. Twitter: @kirkpinhoCDB