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Believe it or not, these are real deals. And sometimes they actually work.
“You hear of shoppers throwing sweeteners into the mix – wine, dinner – to get the house,” said Esty Perez, an agent for Knipe Realty in Portland, Oregon. “Then a buyer comes along and says, ‘Hold my beer.’ Let me take that up. ”
Perez said one of his clients was in a bidding war for a $ 530,000 home and offered $ 25,000 above the price.
The other top offer was just over $ 15,000. But that buyer also threw in 10 Ether coins, which – in early May, when Ethereum was trading at $ 3,900 – were worth nearly $ 40,000.
“We couldn’t beat that,” said Perez. “My client couldn’t offer cryptocurrency to counter this. It was kind of ridiculous.”
In many highly competitive markets where cash offers well above the asking price are standard, buyers have found some mind-boggling ways to stand out.
Buy two houses to get one
Would you buy two houses just to get what you really want? A buyer in Austin, Texas did.
Competing with 50 other home bids, the buyer offered more than $ 100,000 above the asking price – all in cash, according to Thomas Brown, agent and founder of The Agency Texas, who represented the buyer, who moved from the San to Austin Francisco area. But this offer was fulfilled by other buyers. So to seal the deal, Brown’s buyer offered one more thing: to buy the seller’s next home.
In total, the buyer paid $ 1 million for a $ 500,000 home, Brown said. “Buyers come here because they live in condos for a million dollars and see they can buy a 3,000 square foot home for less. They say, ‘Even if I pay more, can I only get in for $ 1 million?’ “
Brown said his buyer was concerned that all of the money on the home he wanted would cause property taxes to shoot, so they preferred to invest the extra money in a new home for the seller and keep it as a separate transaction.
Brown got an understanding of the seller’s needs and plans for a next purchase. Together with his buyers, they forged a deal that involved two separate transactions: the house the buyer wanted listed in the $ 400,000, and a new home for the seller listed in the $ 300,000. Both exceeded their list price and were paid for in cash by the buyer.
“There are currently multiple listings for each home regardless of price,” Brown said of the Austin market. “I’ve never seen anything like it before and the reality is that it won’t stop anytime soon.”
Adam Pugh, real estate attorney and partner at Cagle Pugh law firm in Austin, said buying two houses just to get one is pretty wild but creative.
“While we see people from all over the country paying too much for Austin real estate, I’ve never heard of anyone buying a seller’s nearest home as an incentive,” he said. “But honestly, it’s not even that surprising.”
Money – a lot more money
A mid-century, three-bedroom home on a cul-de-sac in Berkeley, California with expansive views of San Francisco Bay was almost a one-of-a-kind property, said Jill Carrigan, an agent for The Grubb Company, who listed it this spring Has.
“It ticked all of the boxes for a lot of people,” she said. “I’ve never had a property with 29 offers and buyers have raised their bids without our objections. The Bay Area is always competitive, but I’ve never seen anything like it before.”
The $ 1.15 million home sold for $ 2.3 million in cash in two weeks, double the asking price.
Neither Carrigan nor the salespeople who had started preparing to move to Texas had expected this to happen. But this offer was obviously not to be missed.
“People get very creative with what they offer,” said Carrigan. “Sometimes when it’s a photo finish and someone throws in Warriors tickets, it could be a tie-breaker. But at the end of the day, it’s money and a clean offer that usually win.”
This year more people are paying a lot more to own a home.
The Berkeley home was just one of hundreds of homes in the U.S. that sold for $ 1 million above asking price this spring – 310 of those sales were nationwide in the first quarter of 2021 alone, up 74%, according to Zillow. compared to last year.
And paying half a million dollars above list price is not that rare. Zillow said there were more than 940 sales in the first quarter that were more than $ 500,000 above list price, twice as many as last year.
Remove impediments
Buyers with the money to offer sums well above the asking price certainly have the advantage of pushing first-time buyers and qualified homebuyers in need of a mortgage further down the seller list or out of the running altogether. This has helped widen the US wealth gap, making it nearly impossible for lower-income buyers to invest in a home.
But sometimes money isn’t the barrier – other buyers are.
Brown said he sometimes learns about the main competition through the seller’s agent. By that point, he said, some of his buyers have paid another top buyer to leave. In one case, the buyer offered the competition more than $ 100,000.
“You’re buying time and opportunity,” he said. “The seller gets a better deal. The other potential buyer gets something to walk away with, and my customer offers more and gets the house.”
While this type of offer can raise some eyebrows, Brown said it will work as long as all parties know – both the buyer and the seller.
Pugh said in this situation, ideally, all parties would have some understanding of how the deal will come about, but it would not be legally necessary. Buyer one could pay buyer two to leave without involving the seller, he said.
It may be a small consolation for homebuyers who repeatedly lose bids, but there are buyers who have made big swings, put it all on the table, and hit anyway.
Michael Perry, an agent in Salt Lake City, said one of his buyers noticed sports memorabilia during a house tour. The buyer made an offer to buy the home and threw in two season tickets for a local sports team, he said.
“It was a well thought out idea, but we lost it,” said Perry.
Even if the buyer wins the offer, sometimes the extra gift is just too strange.
In another case, Perry represented a salesman with a beautiful garden. He said the winning buyer sweetened his offer by allowing the seller to continue using the garden and back yard for up to five years after the sale. “That was a little strange,” said Perry. “But super cute of you. You won the bid, but I don’t think the sellers will accept you.”
There was one buyer Perry worked with who made what he thought was a grand slam: the house was listed at $ 1.95 million and his buyers offered $ 2.75 million in cash, which were completed in a week. Perry said his buyers offered 500,000 non-refundable cash on the acceptance, and they allowed sellers to stay in the property for six months to a year before they found their next home.
“You gave them everything,” said Perry. “The only thing they could have added was bring a bag of cash with the offer.”
You still lost the offer, Perry said. The sellers went with a buyer who essentially matched that offer, Perry said, who shows in this market that the package is never very far behind.
“We were gutted,” he said. “I didn’t know what everything in this world would mean after that.”
Correction: The data submitted to CNN Business shows the number of homes sold for $ 1 million and $ 500,000 above the asking price. The sale took place in the first quarter of 2021.
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