Friday, May 12, 2006

Multiple Offers I
The Seattle Real Estate Blog IX

Seattle’s real estate market is really picking up steam this spring. Last year we saw things heat up at this time, with more homes coming on the market and more buyers out there looking. Multiple offer scenarios were common. Many people thought that multiple offers would be out of favor for a few years, but they were wrong. Were looking at a higher demand for housing than we saw last year at this time, and our inventory of housing stock is at least 10% lower than it was at this time last year.

Seattle’s labor market is currently defined by a huge demand for mid-level and upper-level workers, and this translates into a strong demand in the middle and upper levels of our housing market. Geography and zoning restrict the amount of housing that can be constructed in Seattle. Though zoning is being changed and new higher density townhouses are replacing single-family homes in many areas around Seattle, and mid- rise and high-rise condominiums are replacing low-rise apartment buildings and single-family homes in the city’s core, high demand continues to outstrip Seattle’s residential inventory. Because of this, multiple-offer scenarios have made a strong and rapid comeback over the last six weeks.

If you’re familiar with art auctions or antique auctions and the way they work, you know what a sealed-bid sale is. This is where competing buyers submit bids privately, and nobody knows what their competitors are offering to pay. Savvy listing agents can set up the same scenario in a real estate sale. If the seller states that they won’t look at any offers until a specific date, then buyers’ agents can safely assume that there will be competing bids reviewed alongside each of their clients’ bids. In this scenario, it doesn’t matter whose bid was received first, all competing bids are evaluated against each other by the sellers and their agent.

To compete against an unknown offer, buyers are encouraged to include escalation clauses and waive common contingencies, like the finance contingency and the inspection contingency.

I’ll write more about multiple offer scenarios in a few days, so please come back to The Seattle Real Estate Blog if you want to read more about this subject.

All comments are welcome. If there is any topic you would like to see discussed in The Seattle Real Estate Blog, please don’t hesitate to include a request in your comment.


At Mon Jun 05, 06:05:00 PM PDT , Anonymous restoration hardware said...

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At Thu Jun 22, 07:57:00 AM PDT , Blogger Smiley said...

Yes, what do you think might happen by the end of the year. Is this a good time to buy? :)


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