You’ve probably seen countless headlines, especially recently, about bidding wars and low inventory in the housing market. When I see these stories I have to chuckle. Working in Greenwich these past couple of decades, bidding wars and low inventory are not only commonplace, they’re an accepted part of buying and selling here! As an extremely desirable enclave, Greenwich suffers from high demand and low supply, creating a market where multiple bids are to be expected. With limited time-on-the-market and all-cash offers a frequent occurrence, navigating such a competitive market can be challenging.
The best way to succeed in a multiple bid situation? Work with a professional!
Having represented both buyers and sellers over the years, I’ve come to understand the balance required to get a deal that leaves everyone satisfied—and my clients particularly pleased. From getting sellers 10% (or more!) above ask, to guiding buyers in crafting an offer that sellers simply can’t refuse, I know what works for both sides. I’m not going to give away my secret sauce here, (feel free to reach out for a chat) but I will share general advice on what to expect in the Greenwich market, and how to avoid common pitfalls.
It can be surprising for anyone new to our quaint yet vibrant, cosmopolitan town just how cut throat the market can be, and how quickly a home can sell. For me, competition is part of the job, and one that can create unique advantages for both sides if you play your cards right. While thinking that the highest offer price is the sure winner might work in other places, the unique nature of Greenwich makes it more than just about money. And speaking of money… cash will always be king.
Sold to the Highest (but are they the Best) Bidder?
There are many conventional or personal reasons for sellers wanting or needing to move. Outlining the goals that they hope to achieve with the sale is essential to a successful outcome. Each objective necessitates a different strategy to ensure satisfactory (or exemplary) end results.
The first question is always, Why are you Selling?
- Strategic financial decision (investment opportunity or capitalizing on shifts in the market)
- Necessity to relocate (be it for work, school, or you just can’t stand hearing your neighbor’s dog at 6am every morning)
- Family changes (the most common moves relate to the five Ds: Diapers, Diplomas, Diamonds, Divorce, or Death)
- Desire for change (mid-life crises or an update from your astrologer has you wanting something new)
Answering the why allows us to prioritize what is most important and fine tune our approach. Keep in mind, however, that while you may want (or need) your house to sell for a certain price, ultimately it strictly comes down to what the market will bear. Working with a real estate broker, you can set realistic and attainable goals that align with your values and priorities.
At the end of the day, it’s about figuring out what you want, what you will accept, and what is going to feel best for you and your family. Sometimes that’s a fat check. Sometimes it’s a few extra weeks for your kids to say goodbye to their childhood home.
One of the easiest ways to remain in control of your destiny is by receiving multiple offers from which you can select the one that best meets your particular needs. There are ways other than dramatically underpricing to encourage multiple bids. Offering certain concessions allows for a wider range of negotiation.
Some concessions, besides the asking price, to consider:
- Length of closing period (are you flexible on your move out date?)
- Covering certain fees or taxes (think of it as an early housewarming gift)
- Offering generous buy-side commissions (this has always been negotiable, and now it can be an even more transparent part of your listing)
- FF&E (Furniture, fixtures, and equipment that can easily be added, kept, or removed can sweeten a deal)
- Flexibility (be open to what buyers offer and use that in negotiations)
Rather than thinking of concessions as something given away, I see them as leverage that can be applied. They enable your goals while allowing a potential buyer to feel empowered in their purchase. It is not about one side winning, but figuring out how to ensure each side feels like they are getting a fair shake.
(Photo: 1 Seagate Road was listed by Berkshire Hathaway HomeServices New England Properties)
Take It or Leave It
When representing buyers, there are different things to consider, but it still starts with the same question, “Why are you moving?”. While the answers are based on similar circumstances, more often buying comes with a certain urgency or deadline:
- Desire to stop renting and own a home
- Long-term financial security
- Investment portfolio diversification
- Schools/Family
- Relocation for work
Many first time buyers in Greenwich are drawn to the local schools, so their search area is generally constrained to a focused area. As I mentioned previously, inventory in Greenwich is always tight, so highly desirable properties often receive multiple extremely competitive bids. What can a buyer do to make sure they don’t miss out?
I suggest starting as early as possible so that there is time to educate yourself and get a real feel for the market. Being rushed into a purchase too quickly can lead to rash decisions that carry long-term consequences. This also means getting your financial ducks in a row to present the best version of yourself when the time comes to apply for a mortgage or appeal to a co-op board.
Drilling down into the details of personal finances might feel intrusive for many clients, but if a mortgage is required, the lender is going to ask for a lot of supporting documentation. Prior to making any offer, I work to ensure that a client’s finances are iron clad (I’m not an accountant or financial advisor, but I have done this enough times to know what banks like and approve). Believe me, in a market like Greenwich, you want the first impression to be flawless!
In addition to the deal sweeteners above, some other considerations for a successful bid:
- Inspections (are you willing to buy the property without an inspection, or maybe even site unseen?)
- Impeccable credentials (shady financials fold like a house of cards against multiple bids)
- Humanity (at the end of the day, you’re negotiating human to human. While you may be communicating through brokers, there is a lot of emotion involved in home buying and selling. Making an offer that is both mutually respectful and beneficial can go a long way)
- Me (I only share my most successful strategies with my clients…)
So…How do I WIN?!
Navigating multiple bids is not something that everyone is comfortable with. Similar to haggling in an open market, it can be stressful and discouraging if you are not familiar with the language and formalities of negotiation. With something as serious as a home, and a long-term financial investment, the stakes are high. Errors or mistakes mean serious money, not to mention emotional fallout.
While waiving a home inspection might lead to an accepted offer and a speedy closing, discovering a plumbing issue after move-in could mean additional unexpected costs. Conversely, accepting the highest offer with a 30 day close might sound great, but the stress of trying to find a new house and moving in a month might not be worth the additional money.
Working with an experienced broker ensures that there is always a fiduciary fighting for your best interests. Sometimes, that means avoiding multiple bids all together and instead opting for an off market sale or purchase. If moving is something you’ve been thinking about, talk it over with a broker first. Being well-prepared, and backed by a knowledgeable & highly experienced team will ensure that you are protected and able to secure the best deal possible.
Remember, sometimes what we really need is to be reminded of what constitutes a “win” in this challenging marketplace. To paraphrase Warren Buffet “it’s far better to buy a great house at a fair price than a fair house at a great price.”
