Jason Bramblett Real Estate Show Podcast
Jason: Good morning and welcome to the Jason Bramblett Real Estate Show. Hope everyone is having a fantastic Saturday. A great weekend planned I am sure, and of course, we've got excellent and awesome things to do right here in October all over the Triad. Whatever it may be that you have got going on, festivals, fairs, Church outings. You've got all kinds of great stuff happening. We are going to dig into well all things real estate here in just a few minutes. You may be getting planned and ready and started and looking down the road toward the holidays, and one of the planning activities you might have is thinking about getting your house ready to sell. So we're going to talk about what you could do now, but also digging into plans for the spring. There's no better time to get ready for the spring then now. It is, believe it or not, in the next few weeks, if you put your house under contract you actually will be closing in 2020. How crazy is that? It doesn't even seem possible, but it is right around the corner. Sixty-something days to the big man in the red sleigh showing up. It's going to be all kinds of good times and good fun. Today we're going to continue with our series on getting your offer accepted, and for our owners out there, how to choose the right offer. If you got a selection and multiple-offer situation, which one do you choose? Joining me in studio, Mr. Keith is here, doing what he does, making me sound good, and bringing the great questions. Good morning, sir.
Keith: That is not hard. I like this topic because my wife and I, we are about six weeks now into our new home, and an apparently we picked the, I don't know if it's the right house or if it is the wrong house because every time we bid in a house, it was us and for other people. So if you're not us, if you're the first with the house, how do you deal with it? If it's not just the highest offer what is important>
Jason: Well, it is always who can get across the finish line for sure. It would seem on the surface that the highest offer certainly would be the obvious choice. Sometimes we get blinded by that number and so that's really what we work with our sellers. Really, there's many, many reasons why somebody is selling a home, but I will tell you and in 22 years of selling real estate, I rarely see price as really the leading indicator. Most people don't call us and say hey I know I can get the most, the highest price. I want to sell. No, it's never that actually. It's always something different. We get people calling us every single day just like clockwork to say, hey, here's the reason why. Usually prices are not even close. It actually is not even in top three. Owners will basically, hey we've got a problem. We need to sell the house to achieve this goal. We've got to relocate. That's a big one that we deal with all the time. I got to be somewhere. I got to be in Texas by December 10th because I got a new job and that new job is not waiting on you. It's going to happen, and you need to be with the one to get there. We have my spouse passed away. Now, it's something we do here. It is one thing that does happen in this world and they need to downsize. They need to relocate. The house is empty, and the kids are gone, and we got all this extra house that we are not needing. We don't need to heat and cool it. We're ready to downsize. It is the empty nester syndrome. I lost my job. That's a big one.
Keith: That is a tough one.
Jason I lost my job, and I need help –
Keith: It happens.
Jason: -- and that's a crisis. When we've got to move quick. The other downside to that is sometimes that's a twofer. I lost my, and I'm getting a divorce. Sometimes it can be a twofer in that one. But divorce is something that does happen, and we have to help the spouses through those situations. Positive side is we have outgrown the house. We've had a couple babies. Everything is shrinking. I'm convinced that each kid needs about a thousand square feet for the debris that they bring into the life. It is unbelievable, especially with grandparents.
Keith: Listen, I know my daughter needs at least. My daughter does not travel or live lightly. I will tell you. She is 10 and she's all over. She's taking the whole house.
Jason: Yeah, it's amazing. It's like they've looked at the four walls of the room and they're like, nope, not enough.
Keith: That happened to us? I swear.
Jason: Yeah, it is amazing. You throw a couple kids in there and man. How about this? I got a promotion. Hey, that's excellent. I got hey, I need a bigger house, bigger, better things. I got a promotion. Things are, as they say, we are a moving on up and they want to do that. The kids are going to another school and we need to be closer. We are tired of the commute. We are tired of driving back and forth. We are retired now, and we want to downsize so that we can travel. We want to see the world. These are the reasons that I hear almost every single day, and really not one of them has anything to do with the price of the house. It all has to do about the pleasure or the pain that we're seeking in what we are wanting to move forward in our life. We need to downsize. We need to relocate. We need to take advantage of the job opportunity. So when we are looking at this multiple offer situations really it's the one that solves this goal that really and also has the highest surety of going through is the one that we want to look at. It's not just price. It is so easy to become blinded by that price. But price really never actually solves any of those problems. The only thing that solves any of those problems is the house selling and that is a key thing. So most offers, it's interesting. Most of the time when you're in a multiple offer situation it is just a few thousand dollars typically at the end of the day that is really separating these offers We are not talking about million-dollar swags here. We're not even talking about $10,000 swags. Sometimes we're talking to hundreds, four, five, six. hundred dollars. But typically, it's a few thousand bucks. Put it in perspective. In today's money, think about this. Do you really think like, look at some of the really wealthy people in the world. I'm pretty confident to say that Warren Buffett didn't go oh man. Hey Keith, I got $2,000 more from my house. So cha-ching, I'm a billionaire, right? Bill Gates didn't reach his level of wealth because well, let's face it didn't get because of that $2,600 more that he may have got. That didn't get him to the next level and sometimes we get short-sighted on that. We look at the entire offer in comparison with your goal and the reason that you are selling, and sometimes it is the highest offer that is the best. But I do find most of the time it is not. It is not necessarily the highest in price. This is where having a great real estate agent that can really dig in and do the due diligence that can help you find the best one. This is really where their weight is worth the gold that you pay in the fact that yeah, they could bring you options and options is always a good thing. Three offers is better than one typically. Now, sometimes it's one offer and it just makes sense or it's the one offer and it's the only one you have to deal with. But typically, in today's world of multiple offers, the best real estate that we have out is simply just one that is going to stick and it's going to help you reach your goal. And that's the key. That's the reason you're selling is to reach that goal, whatever that may be for your family..
Keith: So these are all kind of generalities. Can you give us a specific example, maybe walk us through the process of making a good decision on this?
Jason: Absolutely. I will give you an example John and John and Betty we will say. Name protect the innocent or is it the guilty. Maybe it is the guilty. I don't remember as well. Probably both. Yeah. But they did have a house in Oak Ridge, and they needed to sell. And the reason in my eyes, they were building a home at the coast and really what they were looking at was to get it sold and the timing to be right and everything was, they had a plan. They had a Plan A. Well Plan A didn't work because they had their house on the market for six months. They had no offers and just a very few showings. Their agent was really only focused on one thing according to them and which was lowering the price. Every single time that they went to talk about a game plan, what they could do different, how we're going to get people through the house, how are we going to get this sold in time? It always came back to lower the price, lower the price. Just as a side note lowering the price is not a marketing plan. That's you're chasing down something which is never a good place to be. So this was extremely frustrating for them. You've hired this person to get their advice the agent assured them that the price was right, and they were going to bring a lot of people to the house and they would get it sold in no time. Well, no time was six months, and nothing had still happened. They felt basically that they were trapped. What they really fell into was the trap of they got their listing bought. Some of you don't know what that means but that's real estate slang for basically that agent had told them whatever they wanted to hear in order to get their sign in the yard to get the listing. Unfortunately, this happens way too often. Really what happened is the market spoke back and said no and so at the end of the day unless that lets the agent is writing the check for the house, they're really not guaranteeing you anything. The market is going to really dictate that. A good agent is able to look at the market indicators and tell you what it is saying. It's going to forecast that out. There really was no plan at all other than to get the listing, which job accomplished. The problem was is it didn't do anything. It did not help them get out there. So basically, they slam the sign in the yard. They put a bunch of free advertising out there that they you get when you just stick a home in our multiple listing service and nothing else was done. Now even in a hot market, you still have to be very proactive in pushing out your message. If you just sign up for what's free, then you're just being reactive. You're just dealing with whatever comes at you. That's not a great offense. That's not a great offense at all. You want to really be proactive there. As a matter of fact that system, by doing that, it actually only works about 30% of the time, which means a 70% failure rate. You can you can check with any real estate agent the in the area and that they can pull the multiple listing stats, and they will be able to show you that that system just doesn't not work. You cannot just stick a sign in there and hope that everything is going to go away is going to happen. So what happens with old John and Betty? Well, they see the fact that well that beach house may be slipping away from them, and they are getting very frustrated and they want to get to the coast because the house is almost done, yet not happening. They agreed to hire us and what was great about that is we actually did get that house sold. Help them get onto the coast. But here's what we were able to do. We were able to produce multiple offers in just a couple weeks. And how we're able to do that is because we are aggressive in pushing out that message instead of being reactive, very proactive. When you take a proactive stance you control what is coming back to you as opposed to just waiting and seeing what is going to happen, you go out and make something happen. And so you have some control that. Here's the thing. We got the offers in. What happened? Like most folks, John went straight to price. Hey biggest number wins, right? It's just almost human nature.
Jason: It is and as a matter of fact, his exact words were obviously we're going to go with this one. It's the highest. Not so much. What we had to do was we had to work through each one and so here's where the diligence of a good agent pays off. We reached out to each one of the banks and then spoke with the lenders. Now not every lender’s qualifications or their due diligence to issue a letter is the same that says you're approved. What we did is we went through this due diligence process and what we found out was two of the offers really the mortgage company really hadn't done their homework. Basically, they had a conversation and the people said that they could do this, and based on that information, they whipped out a letter. Problem is nobody verified anything.
Jason: The other two offers that we had, and we spoke with those the banks there, the lenders there, they actually went a step further. So not only did they get the information, they verified the information. They pulled the credit. Everything was in a line. And in this case that was not the highest offer. What we looked at is if any of these were going to be to the finish line, which one is it going to be? Which one of the four? Well two were dismissed really quick because really no due diligence had been done. They were going to basically do their due diligence while they had the house taken off the market. But what if the answer would have been no or something different three weeks down the road? Doesn't help the seller at all, right? And so we wanted someone that had, we did not want to be that learning curve. What we did is we went with one of the other two offers, and it was very clear that the bank had vetted out the people properly and that is all part of what your professional real estate agent needs to be doing. We want to have conversations with every single lender that the buyers are making an offer on the house so that we can verify and vet these things out. In this case, on the surface, the highest offer looked like it was the best but actually it wasn't anything. It was really just paper because nothing had been verified. Essentially, they had a conversation, and I'm sure went something like this. Keith, if you're kind of sort of something like this telling the truth. We're good.
Keith: That's interesting because, I won't name the bank, but when we went through trying to get pre-approved, we went through about 10 days, two weeks of we need this, I need this, I need this, I need this, I need this, and constantly back and forth with our banker and honestly, I just assumed that was law or what banks did. I didn't realize that there were different policies from one lender to another lender as too how the scrutiny of how they look at your qualifications.
Jason: Yeah. So the qualifications are pretty much the same once you get to hey, we are going to give you money, but getting it started, not the same. There are some that will just have a simple, they operated on everybody tells the truth.
Keith: I wish that were true.
Jason: Yes, of course, they do. Sometimes it works out just perfectly. Everything is exactly like what the people said and there is no issue. And sometimes that is a relationship between the bank and the person that's borrowing the money. I find with real estate you got to realize people have either never done this or they haven't done in 10 years. When you don't borrow money at this level for a decade, what kind of relationship could you actually have? We find more so than not most buyers don't have that relationship. But because we were able to create the options for the owner that is the key. They were able to choose the best offer that got them to the coast and that is the key thing. So we're going to do this. We're going to take a quick timeout. If you'd like to head to the coast or the mountains or whatever it is, or if you're just stuck and tired of not seeing the results you need, get in touch with our office at 553-0796. Jason Bramblett dot com, and we'll be back in just a few minutes.
And welcome back to the Jason Bramblett Real Estate Show. We both were digging into multiple offers how to get that accepted, how to just really dig down and find out which is the best offer and what we have found is the best offer that is the offer that sticks that will help you achieve the goal and not necessarily the highest price every single time.
Keith: I'm willing to bet that you could tell some very interesting stories. Of course, with all the names and all the particulars covered up, but you've probably seen just about every scenario, every pitfall, everything that can go right or wrong with an offer. You've probably seen things I can't even imagine. So what are some additional concerns outside of that that you have when multiple offers on the table?
Jason: I can assure you of 22 years of being in people's homes, I have seen things in which nobody's eyes should see. Yeah for sure.
Keith: I saw a few and I only looked at 7 homes. I can only imagine.
Jason: Right. And you actually were on the edited version of the of the triangle. Hopefully you were. Let's look at scenarios are the best. All I can give you is real-life stuff that we've dealt with. What if the highest offer that you had actually was a well-qualified buyer? And in this case the offer was above asking price. Now, we have to look at the probability of the house appraising for that amount. So we've got a very well vetted out buyer. They are excellently qualified. We've tested everything, but they've offered above asking price for the house. What if it didn't appraise? Banks are set up this way. They're going to loan you money on one of two scenarios - the purchase price or the appraised price, whichever is the least of the two. If you agreed to pay 310 and the house only appraised for 300, where's the $10,000 coming from? There are three options that we deal with in that, and one is the buyer can actually pay the difference out of pocket. So that buyer could bring an additional $10,000 to the closing, and everything moves forward just fine. The seller could actually lower the price $10,000, or number three the deal falls apart and the house goes back on the market. Obviously, that's not a great plan. If you actually looked in our multiple listing service every day, you'd see homes going back on the market, and most of the time it's not anything other than the wrong offer was chosen. Some real estate agents, I should say, will blame oh well didn't praise. Well, yeah, but how many options did you have? Did anybody vet out the options or did you just go with the highest price and it didn't work out. Here's the thing. The seller got sucked into the price. And essentially what I find is a lot of times the agent didn't do their due diligence. It really shouldn't be any surprise for a professional real estate agent if the house is not going to appraise, you have the visibility to see that. Of everybody that is surprised, it should be the agent that is the least surprised that out of everyone because you have so much data at your control. That's where you can give good quality, sound advice there. The downside is money's cheap to borrow and just because it's cheap to borrow and you're willing to have an extra $60 a month on your payment doesn't mean the bank's going to sign up for the extra $10,000. Right? Because rates are so low. Really $10,000 cost you nothing, but $10,000 is still $10,000, and that's how the bank is looking at it. They're not looking at $60 a month. That's what you're looking at. The little number. They're looking at the big number meaning how far upside down are we or could potentially be on this house if things go sideways? We just had this situation in Winston-Salem. We've got two offers very, very quickly on the house. Both of them above asking price, and when we vetted out the offers and actually spoke with the lenders, what we discovered is neither buyer could even pay a dollar more than the appraisal or the asking price, whichever was the least of the two. So that became an issue. We ended up actually declining both offers, and both offers were for more than asking price. Some people would say, well you're crazy, but they weren't going to stick, and there was no way that it was going to happen. We had so much demand on that on the house. There was no sense in setting up ourselves to fail. So in the next 48 hours, we actually got two more offers and one of those offers was excellent. Well, well qualified buyer and the difference was they had the capital to be able to pay the difference if that house did not appraise for the purchase price, and that made all the difference in the world for the seller. They were able to get the most money from the house with the buyer that could give them the most surety that it was going to go through.
Keith: Makes sense.
Jason: That is just patience and experience and taking the time to vet all those things out. So if you are struggling or have struggled to get your home sold, get in touch with us. It's Jason Bramblett Real Estate. You can reach us at 553-0796 or go to Jason Bramblett dot com. Everybody have a great weekend. We look forward to seeing you back here next week right here at 9 a.m.