Remember the Grimm's fairy tale, "Hansel and Gretel?" The one where the young children are led deep into the forest and can't find their way home? Overhearing their father and stepmother's nefarious plans (why is it always the stepmother?), Hansel very smartly leaves behind a trail of bread crumbs so he and his younger sister can find their way back.
Unfortunately, hungry birds eat the trail of crumbs and alas, Hansel and Gretel are lost in the woods until they come upon an enticing chocolate-shingled, candy house.
It's only a ruse . . . once inside Hansel is locked in a cage by the wicked witch who intends to fatten him up and eat him while Gretel is forced to care for the old bag. (Fairy tales are rather gruesome stories when you take a closer look.)
Today's story ISN'T about pretty houses that misrepresent what's inside, (although it could be), or about caring for the elderly, (maybe the witch was just lonely?), it's about the bread crumbs Hansel left along the path. . .
When I'm at an Open House, it's not unusual for interested parties to ask: "How many offers do you think you'll get and how high will the house go?"
(With all due respect, we've only been on the market for a few days, I really have no idea yet.)
Aside from the fact that this type of inquiry requires me to look into the future - a super-natural gift I haven't yet acquired - I'm guessing this isn't a question that's asked in Buffalo, NY, Waco, TX, or almost anywhere else in the United States. In nearly every other market, the listing price of a home is a transparent number meant to jump-start negotiations; one where the result leads to a sales price that will probably be less (not more) than the figure on the flyer; where give and take is standard; and where Buyers have time to consider not only their offer, but to conduct due diligence as well with thoughtfully crafted contingencies and reasonable time frames. (Remember those days? They feel like a long lost fairy tale now.) And if our market had more equity between Buyers and Sellers, that's how we'd roll here in the Bay Area as well.
Unfortunately (for Buyers), that's not how the story goes . . .
Here, there's still too little supply to meet overwhelming, pent-up demand, thus most properties we bring to market will receive more than one offer (most, not all) and the list price is merely the opening bid in what is essentially, a blind auction. And no, you don't get to know what the other Buyers are offering; that's not the way a free-market economy works (and it would take away all the suspense)!
So while I haven't the gift of foresight, I do have excellent Intel, years of market experience, long weekends spent standing inside the house measuring the public's interest, strong insight based on comparable sales, and intimate conversations I've had with the Sellers before and during the marketing period that reveal their expectations, so what I can more relevantly do (like Hansel) is leave a trail of bread crumbs for you and your Agent to follow . . .
(willing and able Buyers do) but if your inquiry is real, as in: "What's it going to take to get this house?", AND you'd hate to lose out to other interested Buyers, AND you'll kick yourself tomorrow when you do, why ignore the gluten-filled buffet by presenting an offer that doesn't even come close? (Perhaps you've never read the story?!?)
Short of writing the offer myself (that's called "Dual Agency" and I don't recommend it), I'm doing everything I can to provide not just the bread crumbs, but the whole mouth-watering loaf. I'm keeping in contact with everyone who's expressed interest, sending disclosures, answering questions, updating your Agent as to the number of confirmed offers, providing comps, and setting a reasonable expectation, and if that's not a warm, blueberry muffin served on a platter, I don't know what is.
Hello? Don't you like muffins?
In the end, Gretel didn't rely on the bread crumbs, but on her own clever ingenuity and a strong push to free Hansel and herself from the clutches of the wicked witch (that's a plug for arm curls and staying in shape). While your personal story to acquire a house in today's whirlwind and highly competitive marketplace doesn't need to be nearly as treacherous, or as frightening, (meaning, you shouldn't have to shove anybody into an oven to get a house), you definitely want to devise a savvy game plan, come up with a well-advised strategy, and if you're asking me. . . I'd follow the bread crumbshome.
That's usually where the "happily-ever-after" ending lies.
(BTW - no one ever looks back and thinks they paid too much 10 or 20 years down the road. Take the muffin. It's a gift.)
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Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.