“Second Place” is Not an Address You Want

J Philip Faranda May 23, 2010

I think the New York market must be in some stage of recovery, because I am starting to see more multiple bid situations as well as strong first offers. It makes sense; people are starting to realize that the world isn't going to end, and asking prices have declined to a number that is roughly equivalent to 3 years before the peak. Add low rates to that mix, and it is no wonder that aggressively priced homes in good locations in great condition will get more than one offer. 

SO, just when I was getting the hang of this blood in the streets market, I am seeing bidding wars. Call them rare or anecdotal if you want, but I don't believe that it is a coincidence that they have clustered at this point in time. This summer will be 2 years since the Fannie Mae/ Freddie Mac/ Wall Street Meltdown. It will be 3 years since the sub prime collapse. America's economy is not pulled by meandering malaise, it is fueled by an ambitious, productive populace that doesn't let moss grow under its feet. The market is moving toward balance. 

What do I mean by balance? Well priced homes will sell faster and for more. Overpriced homes will sit and rot. Lowball initial offers may either come up with smart negotiating or be jettisoned in favor of more motivated buyers who seem to be in greater numbers now. I have 2 listings which are getting multiple bids now. 

Which leads me to the $26,000 over asking price I submitted for buyer clients this morning. Why would anyone do such a thing? 

Well, if:

  • You've been looking for a year or more
  • And the location is perfect
  • The condition is very, very good
  • The price is aggressive
  • AND there are already multiple bids, one of which is cash and full price, 
then you, like my clients, will decide that the second highest bid is not going to get it done. You can't live in 2nd place. You can't paint it. You can't decorate it. You can't sleep there. You can't wave to neighbors from the porch. You can only wonder "what if we had just offered $5000 more?" If this is THE house, then you go in with your very best number, a number that you can live with if they say yes and you are at peace with if they say no. 

And that is what we did. Because we can't live with, or in, Second Place. 

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