Winning Multiple Offers

"This is the one. This checks off every single box" - the text my buyer clients sent me less than an hour after the 1344 w. George #3 penthouse went live on the market for $975,000.

I looked over the listing and began imagining the swarm of interest the listing broker was likely already receiving. after confirming with my clients when they would be free to view the listing, I secured the first showing of the weekend and introduced myself to the listing broker via text and email - letting him know how excited we were to view the space.

at the showing, the listing broker commented that we were the first of eleven tours that day and that he was also hosting an open house the following day. This is one of the cleanest and unique properties I've been in to date and being located in Chicago's bustling Lakeview neighborhood - just steps from the southport corridor - I knew it was going to be a multiple-offer situation.

after my clients decided they didn't want to look any more and make this their new home for at least the next 5 years, we built a strategic game plan with our offer presentation:

1. With a property like this, I knew it had been priced strategically under $1m to draw interest for anyone who has a budget up to at least $1m - this is not an uncommon practice for sought after real estate, especially in the über competitive chicago housing market. this means that we had to come in strong with our initial offer and given the fact that this is a scarce offering that doesn't pop up all the time, my clients trusted me to make an offer at $1.1m.

2. in addition the the strong offer ($125k over asking price) we also knew we needed to buy "as-is" meaning that we could still conduct an inspection but we wouldn't be able to ask for credits for anything that might have come up during the inspection. we also submitted an appraisal gap waiver - this means that if the appraisal comes in under the contract price, my clients would have to pay the difference out of pocket. example: let's say our contract price was $1.1m and the appraisal came in at $1m flat - the mortgage lender will only finance the price that the appraisal comes in at, which would force my clients to pay the $100k difference in cash out of pocket to continue with the purchase.

3. even after making this as attractive and strong in our first offer, I received a call from the listing broker confirming it was between us and another group who had identical offers - even down to the appraisal gap waiver and as-is contract agreement. he also confirmed that they received many other offers between $1.025m and $1.075m that he was not going to entertain, so it was quite literally between my clients and another group. after delivering this information to my clients, they began to grow a bit wary of what else they might have to offer to win the bid war for this property. they said the most they'd like to come up in their purchase price was $10k - $20k, making the new offer up to $1.12m. I let them know that I would personally make it a round $25k increase because we wouldn't want to miss out or lose the property over $5k + write a letter to the sellers regarding how much they love the place and how much it feels like a home and a place to start and raise their family - (in this type of market, I find "love letters" to the sellers are sometimes corny and come off as disingenuous, but when we toured the property, they had a nursery that looked fairly new, meaning they had created new memories with their newborn here that will carry with them - so a bit of an intangible value that I saw an opportunity in my clients being able to connect with).

4. my clients called me later that night after considering what I had presented and they confirmed my recommended increase of $25k making our new offer price $1.125m and they also let me know that they were beginning to write a letter to the sellers describing their hopeful future home and the memories they could create there. once the letter was finished, I presented our new offer and terms to the listing broker who said he would relay everything to his clients in the morning and that they specifically requested "no love letters" during the listing appointment, but that he would summarize and convey my clients' messaging to them.

5. "this is the call you want to be receiving" said the listing broker on the other end of the phone call. we had won and beat out the other group's best and final offer and he made sure to comment on the letter to his sellers - stating that after he began to summarize it, they asked him to send the full copy, and ultimately it is what gave us the competitive edge over the other group. that, and the other group only came up $20k!! after I gave my clients the good news they were incredibly grateful for my market expertise and my know-how in making sure they came in strong and ultimately won the bidding for their dream home.

this is one of those stories that I felt compelled to share because there are so many agents and real estate professionals out there that are afraid to be real and honest with their clients about what it takes to win highly sought after real estate in the Chicagoland area. with me, what you see is what you get. and if you are looking to work with an agent who quickly builds rapport with the list side, can navigate you efficiently to the closing table, and has an incredible team of lenders, attorneys, and inspection service companies, I would love to grab a coffee to discuss your real estate goals.

matt ayo, real estate broker