If hell had open houses.
Parked cars jam the street for a block in both directions. Buyers stream into and out of the open house like ants swarming candy. We park so far away that the house might be just a mirage, then hoof it. We pass an agent, a free-lancing opportunist working the crowd, laying his one-minute elevator pitch on a young first-time buyer couple. He's saying, "At my office we've sold all our bank-owned homes". The husband, not believing his eyes, parries with "It's still a buyer's market".
So what exactly would it take for hubbie to believe he's looking at a seller's market? A presidential proclamation?
Maybe fifty people mill about the tiny rancher, in front, inside, in the back yard. The listing agent is backed into a corner of the living room, selling, no, not the house say what? but the "innovative process" he's using to sell the house. Another agent, his assistant, approaches us with a sheet of green paper. It's the bid form we'll use to make an offer on the house, if we feel like making an offer on the house.
The bid form is simple: how much do you want to pay? It's not big on annoying details, and it doesn't pick nits. For instance, it doesn't ask you to prove that you can pay what you say you'll pay. It doesn't ask you for any other offer terms and conditions you might need or want, terms and conditions the seller might need or want to know to make an informed decision. Have you read and approved the legally-mandated disclosures? It doesn't ask. Do you need a one-year close of escrow? It doesn't ask. Do you want a thirty-day contingency so that your mother-in-law in Dubuque can come out by Greyhound, the next time it's not her week to have the ladies over for canasta, and give the house thumbs up or down? It doesn't ask. All it asks for is price and contact info. A remarkably discrete bid form, one willing to overlook any deal-killing short-comings or idiosyncrasies you might want to gum up the works with. Except that it warns you it's not to leave the house. Yes, that's where it draws the line.
The house is littered with buyers bent over their bid forms, filling them out with anxious speculative looks as they try to calculate what it'll take to fight off this onslaught of competing buyers.
We attempt to look at the kitchen and can't—the assistant is in there, surrounded by a horde of clamoring buyers, trying to explain the "innovative" home-selling process. It's unclear what they're selling here. The house? The process? Themselves?
We wedge our way through the living room to the back yard, looking for a relatively private spot to talk strategy. This won't take long. If the home sells at list price, my clients can afford it. But I've told them it's under-priced by at least $75,000, and they can't go that high. Plus, they're using FHA financing and putting down only 3.5 percent, in a market where most buyers are putting down a far more impressive (at least to sellers) 20 percent. My clients go to their max, $455,000, all fingers crossed, hoping I'm wrong.
As we edge back into the house to turn in our bid form, we overhear the listing agent telling buyers how fair and user-friendly his "innovative" home-selling process is (then why the heck are my clients here, with a snowball's chance in hell but with their hearts beating wildly?). Everyone gets to make an offer without going through the hassle of writing an eight-page purchase contract and signing a bunch of pesky disclosures. At the end of tomorrow's open house, he'll call every bidder (as if you could call all these wishful thinkers "bidders") and ask for their highest and best offer (as if you could dignify every green sheet as an "offer"). The "winner" of this second round gets to make a formal offer at that price.
Obviously, this agent thinks that any offer is all about price, and just about price. Cue your mother-in-law in Dubuque.
At this point, at the busiest open house I've ever seen in twelve years of working in mostly overheated real estate markets, one of my clients decides to use the only bathroom in the house. Now there's someone who's not afraid of a little risk.
A few minutes later we're standing outside the home, watching more buyers drive up, stream in and stream out. By now I'm pissed. I lie. I've been pissed since the minute I pulled up. This isn't an open house, it's Fellini meets Babbitt in a dark alley. The listing agent isn't marketing the house—which by Sunday afternoon will probably have grooves in the floor from all the buyer traffic herding through it—he's marketing himself and his mondo bizarro "innovative" home-selling process. I turn to my clients and indignantly demand, "What's the point? Ego gratification?" The opportunistic agent, taking a break from working the crowd, looks at me like maybe he should call Security.
The next afternoon I'm out with other clients, in a hilly area with poor cell phone reception. About 4 PM I notice that my BlackBerry has voicemail. It's the listing agent, who's called to share that he has 95 offers ("offers"), that the highest "offer" is $600,000, and that I have fifteen minutes to call him back with my clients' highest and best or they're history.
That was an hour ago.
Of course, it doesn't matter that I missed the fifteen-minute deadline, because like most of the deluded hopefuls who stampeded through the house, my clients were never in the running, not even close. But say they had been. Fifteen minutes? I realize the tight deadline is supposedly to screen out bogus offers, but if your "innovative" home-selling system differs from the traditional system mostly in that it guarantees you'll get bogus offers, that's like swerving to avoid a squirrel in the road and driving into a bridge abutment.
A month or so later I check the MLS and see that the house closed, not at $600,000, but at $572,000. So what happened to the $600,000 offer? Don't tell me it wasn't worth the sheet of green paper it was scrawled on. That would be so...inevitable.
Yes, fair and user-friendly, that's what I call this "innovation" in home selling, about as fair and user-friendly as the third circle of hell. And I know at least two buyers and one agent who sure hope it isn't the Next Big Thing.