BUYERS ARE SUFFERING POST MULTIPLE OFFER TRAUMA FATIGUE SYNDROME (MOTFAS)
Six offers later, and we still have no house. 28 offers on the first one, 14 on the second, 25 on the third, it goes on. Forever. They were good offers, all $10,000 to $15,000 over asking price.
Good earnest money, fully approved, with a letter saying how much the buyer appreciated the seller’s divine taste, and how much they want to make it their own. The lender called the listing agent to cheer him on.
Still, the response came back, “Thank you for your patience while we comb through 28 offers.” Or, “We have 25 awesome offers, and will get back to you as quickly as possible.” Then the listing agent calls and chirps, “You offered $280,000, can your guy go cash?” I snarled, “No, at $280K he can’t go cash and if he could he wouldn’t buy this house.” The last one was even worse, they kept everyone waiting for days and only kept offers that agreed to close mid-July. Then, finally, “Thank you but the seller has decided to go with a stronger offer.”
I called the buyer to translate that into something that wasn’t an insult. There could be a number of things that cause it to be a stronger offer. Like: cash, no inspection, earnest money 20% of the purchase price, as is, closing date in August, etc.
This year the spring market in the Twin Cities started in January. What is so astounding about that is that it is usually 20 degrees below zero in January, and house shopping is not a winter sport. End of December to March is normally a flat line with a few beeps. January of 2017 was unseasonably warm, up to forty degrees above normal. And, warm temperatures drifted into February. No one told Minnesota home owners that the 2017 spring market would begin right after Christmas, and they wouldn’t believe it anyway. Winter sellers have to keep the walkways shovelled, add a boot bench for people to take off shoes, make sure that the home is bright and cosy. Days are short, the sun sets at 4:30PM so we have limited hours when we can actually see what a house and neighbourhood looks like. The hardy souls who put their homes on the market early were rewarded with a waiting line of eager buyers.
Like the rest of the country, Mpls/St. Paul has a drought of listings, 16% below last year, and that was a record low. To make matters worse, I’ve heard rumour that one of the local brokerages is advising sellers to withhold from MLS so the agents can network within the company. The spin is that they will have less traffic and better offers. I would imagine that some sellers will agree until they hear that their neighbour got 14 offers in two days. The question becomes; are we losing Broker Reciprocity? There is a lot of ‘Coming Soon,’ that morphs into “Sold before Market.”
Buyers are frustrated that they can’t find a home to love that they can actually buy. Prices are being pushed higher than during the real estate boom. Even if a buyer has leverage to go substantially over the list price, we have appraisals. Do we want to jeopardize a buyer’s financial future by selling them a home that is so overpriced that they’ll be upside down immediately? Have we seen this story before? Yesterday we toured a home well within the buyer’s budget, but he said he wouldn’t even attempt to write on it because it will go way over list price. Another agent that I knew what showing the same house, his client didn’t write for the same reason. Multiple Offer Trauma Fatigue Syndrome has set in, it’s epidemic.
We hope that the sun will come out tomorrow, and that there will be a late spring rush of sellers at reasonable market prices. At some point buyers will just give up or wait it out. Then we will wonder ‘Where have all the buyers gone? Long-time passing. Where have all the buyers gone, when will we ever learn?”