In Silicon Valley, multiple offers have become the rule and not the exception in many areas. One property taking offers tomorrow has 13 disclosure packages out and it's in a price range where the ratio of offers to packages is about 60%. If a home gets multiple offers, does it really matter how many there are? In short, yes. I'll tell you why.
Around here, the typical ratio of disclosure packages to offers if 3:1. Meaning that if three packages go out, there will be one offer. Before writing an offer I'll call the listing agent to find out how many offers are confirmed and how many packages have gone out. If the agent sent out three packages, there's a good chance my clients may be the only offer. Depending on the property, there might be another offer. Either way, it means that my clients are unlikely to have to overbid the property at all and if so, only a little.
Things get more complicated as the offer count goes up. If there are four offers, odds are that at least one will be full price and depending on the price of the home, they may all be at or over the asking price. This changes the pricing and terms strategy for my clients. If they're coming in with all-cash, then a decent price and quick close could get it. If they have financing, they may have to bump up the price to overtake any cash buyers. Either way, the strategy changes. Competing against multiple offers requires a careful mix of price and terms.
So, yes, knowing the number of offers makes a huge difference in the price and terms of whatever offer my clients make. With many Silicon Valley homes selling over their asking prices, coming up with the best combination of price and terms is important in multiple offer situations.
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Bryan Robertson, Broker Associate | T: 650.799.9951 | Email: bryan@serenogroup.com | Website: http://www.BryanRobertsonHomes.com |CA License: 01191946 | Sereno Group - Los Altos branch | 369 S. San Antonio Road | Los Altos, CA 94022
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