Is THIS a Bidding War?

Yes, but not quite as aggressive as an open bidding war.  Instead, we asked the 2 buyers to

re-submit their “highest and best” offers by 5:00 pm of the next day.

The Next Day...

1. Early in the afternoon the buyers with original full price offer raised their offer to $200,000 above the asking price in the early afternoon.
2. Then we waited for the other contenders to submit their “highest and best”. 
3. At the last minute before the deadline, the other contenders’ broker called and said: We are OUT, my clients do not want to play in the “Highest and Best Game”, and they are not offering anything anymore.

QUANDRY:

How Do We Approach the Buyers Who had Bid $200,000 Over Ask?

Here we had an offer of $200,000 above asking price, but the other buyers had actually gone away. 

• Do we take the new higher offer, $200,000 over asking price?  or
• Do we level with the buyers and tell them that the other buyers had withdrawn such that we should accept the original full price offer??
  • Some would say: “get the most money for your client”
  • And some would say, “be transparent and honest and go back and accept the original full price offer."

How the Sellers (our Clients) Responded

After a good conversation between us and our clients in which we strongly advocated honesty and transparency, our clients decided to do the right thing:  they instructed us to tell the buyers that the other buyers had gone away, and they would accept the original full price offer.  Yes!

Buyers Were Joyful!

When we called the buyers’ broker to tell his clients that the original full price offer would stand, he was pleasantly amazed and he later relayed to us how happy and respectful they were towards our clients, the sellers.

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.... Transaction Phase – Possible Troubles

During the inspection and insurance acquisition process, the buyers ran into a huge problem with the cedar shingled roof.  

Because of growing droughts and fears of wildfires, no insurance company would insure the house for less than $75,000 – ouch!  The only way to get a reasonable premium would be to replace the entire roof with a metal roof - a $100,000+ expense.

Did the Buyers Demand Inspection Money?

In many transactions when a buyer finds physical inspection issues that cost money, they demand that the seller pay for fixing those problems.  In this case, the buyers felt the kindness that the sellers had been transparent to take their original full price contract, and so they did not ask for one penny, and they planned to have the roof replaced immediately after closing.

Closing Day Scramble

As we approached the closing day, both the buyers’ broker and we learned of a possible conflict coming…

• The Sellers needed to spend the last 3 days of ownership in the house packing up personal items and wanted to spend the night of closing in the house before they flew home to Texas the following day.
• The Buyers were flying in from San Francisco on that same closing day and planned to spend their first night in the house following the closing process..
• Uh-oh, what are we to do???
• We, the Sellers’ brokers, and the buyers’ broker decided to ask our respective clients if they would like to have an impromptu “slumber party”together in the house the night of closing. (Oh, how audacious!)
• That way they could get to know each other, the seller could show the buyer neat things and quirks about the house, and they could possibly become friends.

The Night of Closing

Yay! The buyers and sellers agreed to spend the night together!

we introduced them at the house in the late afternoon, and they had a great time together!  So much so, that the even went out to dinner at a Telluride restaurant together.

Our Commitment to Friendly Transactions

This was a tremendous learning experience for us, and we continue to encourage buyers and sellers to come to good meetings of the minds and to minimize conflict during the transaction phase of selling any real estate.

We hope to service all our buyer and seller clients in way to make the transaction phase as smooth and friendly as possible.

Shortly after this wonderful transaction, we had another sale whereby we invited our buyer clients, the sellers’ brokers, and their clients to have a closing altogether around the title company’s conference table and then out to lunch afterwards.

Negotiating strongly for our clients, yet smartly in a friendly manner will usually benefit both parties, and we look forward to having you as our clients in the future!