They’re Back with a Vengeance:
Bidding Wars on Houston Real Estate
by Karen Derr
It seems like only yesterday that Houston Realtors were lamenting the slow-down in the real-estate market and an end to the seller’s market. In past decades, even in inner-loop neighborhoods, a normal market meant plenty of homes to sell, an average of 90 days on the market, and some bargaining off the list price. In 2008 we were back to that reality. But with the dawn of 2012, Houston buyers are feeling confident in our local economy and are once again eager to realize their real-estate goals.
With winter weather being almost nonexistent this year, weekend open houses in trendy neighborhoods are seeing record numbers of lookers—reportedly as many as 60 visitors through a home in two hours. It appears that with the end of a lackluster 2011, Houston is experiencing some pent-up demand, and the available home inventory is not keeping up with the number of buyers. The Houston Association of Realtors reports we are experiencing a three-year low in available home listings.
Bidding wars are widely reported in close-in neighborhoods like the Heights and Montrose, and they have even been seen in Katy. This, of course, is good news for home sellers, but creates more than a little stress on all parties involved. Bidding wars most often happen in the first days a home is on the market or after a major price reduction.
Greenwood King’s Debbie Levine reports her last two listings went under contract in the first two days on the market. Multiple offers are stressful to not only the buyers and sellers, but to the Realtor who must be fair to all parties. “Buyers who find themselves in a multiple-offer situation on a house they really love should make their first offer their highest and best, even if they have to go a little above list,” Levine advises.
Representing a lender in a recent sale in Galveston, Realtor David Bowers with The House Company relays that despite getting offers well above list price, the lender chose to only work with the first buyer that came in at list. Bowers says corporate sellers can choose to adhere to guidelines that are quite different from individual homeowners. In most cases, it’s the seller’s agent’s job to get the best price for the seller, even if that means engaging with multiple buyers at once. Buyers should be advised that a contract is not a done deal until it is signed by all parties. There is generally no such thing as a verbal contract in regards to real estate in Texas.
Inner-loop specialist Andy Weber says he’s certainly seeing bidding wars in Montrose. “While there are lots of inferior properties out there, the good ones are in high demand. I recommend my buyers write a personal letter to the seller to be included with their offer,” says Weber, who is with John Daugherty Realtors. He says he’s seen this strategy work in putting his buyer’s offer ahead of the pack.
Boulevard Realtor Jerry Jaggers reports he wrote an offer for buyers in Meyerland earlier in March, and six offers came in on the property during its first day on the MLS. “It didn’t even have the photos uploaded yet,” marvels Jaggers. The sellers chose his buyers’ offer, although it was not the highest in price. Factors like close date, move-out date, and the financing qualifications of the buyers are often deciding factors when sellers choose among offers.
Karen Derr, a Houston-area Realtor and the founder of Karen Derr Realty, now Boulevard Realty. She writes and speaks about home and small-business topics.