Why did Home Seller accept a cheaper offer than ours?

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Dear Real Estate Advisor,
I submitted our best and last offer on a house that received multiple offers and was never heard from, so I just assumed we lost. Several weeks later, the house appears “Sold” at a price lower than our offer. Can it be done here in California? Do you think that was a mistake or did the agent just want it that way? How can I protect myself in future bidding wars? I am confused and mad.
– Mel C.

Dear Mel,
Sorry you lost. Although I can’t say for sure, I assume you were not represented by an agent in your bid. A good buyer’s agent would almost certainly have figured out where you stood and what you needed to do to win. Although there are times when you don’t need an agent, the absence of an agent in a multiple offer situation puts the buyer at a distinct disadvantage. Unfortunately, that may be why you’re not settling into your dream home just yet.

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What happens in bidding wars?

It’s possible your offer got lost in the mess, or wasn’t sent from your computer, or the seller’s owner wants someone else – maybe a friend or relative – for some reason. . But there are many other possibilities:

  • Some listing agents simply prioritize email offers from buyers’ agents over individuals.
  • Maybe the winning buyer paid cash or was already pre-qualified for a loan and you weren’t.
  • Perhaps the money you offered for the deposit was so small (say, $500, for example) that you weren’t taken seriously.
  • Maybe your offer had an expiration date; an expired offer should then be reactivated and sellers may have needed to act quickly at some point and have taken the path of least resistance.
  • Or maybe you asked for concessions that the winning bidder did not make.
  • The buyer may even have waived inspection, appraisal and other typical due diligence to grease the deal.

In multiple offer environments, agents of good sellers will always advise their clients to choose the most profitable offer with the least risk.

No law broken

By the way, there is nothing illegal or unethical in California or any state not to respond to an offer. However, it is a breach of ethics if a listing agent does not present all serious offers to the seller, but it involves the seller, so you have no recourse.

All of that aside, it’s rude and unprofessional for an agent to not respond to a legitimate offer. If that makes you feel better, call or email the sellers directly and ask why your seemingly generous offer was rejected, if in fact it was seen at all. If something fishy happened and the listing agent stacked the game for a friend or favored buying agent, sellers should be aware that they did not receive all fair offers and that their agent has acted unethically. First, check your computer to make sure your offer has been sent.

Next time, consider hiring a buyer’s agent, assuming you haven’t done so this time around. Some homes in busy markets receive up to 20 bids, so you should be better prepared and have a professional lawyer advise you on how to win a bidding war in this fiercely seller’s market.

Good luck!

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