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Highest and Best Offers: Giving and Getting Top Dollar

By: Shmuel Shayowitz

What seemed like a once-in-lifetime Covid craze is now, once again, a reality in the real estate market. Many areas are experiencing unusually high demand for new homes that hit the market. In addition, the “above ask” offers are exceeding those during the pandemic when buyers were desperate to buy something fast. There were several open houses this past Sunday in Bergen County that I confirmed had well over 100 attendees. Needless to say, they fetched well above their asking price.

Meanwhile, only some areas are still seeing record-breaking prices. It is a very mixed and localized market that changes quickly. I spoke with a past client outside the tri-state area looking to sell her home for “top dollar.” She explained how she interviewed two local real estate agents – one from her neighborhood and one a friend recommended. She asked my opinion as the two had very wide-ranging views on the sale price of her house. She was unsure about their ability to deliver and wanted my perspective on how to move forward.

While we were speaking, I accessed the MLS records, and I let her know that between the two of them, they had a combined sale of one home in the past 12 months. She was shocked to hear it and couldn’t believe they yielded those results despite their pleasant demeanor and knowledge about selling houses. I named two other Realtors in the area that were the top agents in the marketplace; She acknowledged that she knew them both by name but never bothered to contact them.

Her decision to buy would be predicated on how much they could sell their home for – which is their top priority. Like many, she feels “locked in” to her home because she currently has a very low interest rate mortgage, and any new loan she gets to purchase another home will likely be more than double in rate. Also, like many, this couple’s home has appreciated considerably in value. They are poised to earn a sizable check from the net proceeds upon sale but don’t know how to best utilize the cash.

The conversation then took on two distinct focuses. I wanted them to understand the importance of using an experienced and effective professional when making these important decisions. As much as I appreciate the smiley realtor who lives down the block and knows your mom – I don’t think that is a basis for deciding whom to use as a real estate professional. I also wanted them to understand the numbers as a specific dollar amount to them, beyond the psychological aspect of higher rates versus lower rates.

For example, given the same loan balance, if the new interest rate would be double their existing mortgage rate, that would not mean that their new payment is double. While every dollar matters, their new payment would only be $775 more per month compared to what they currently pay. That in itself helped them breathe a great sigh of relief. We also discussed how they would likely be able to get a smaller loan size on the new house because of all the equity they gained, which can be used towards the new downpayment.

Of course, that bottom line number would depend on the actual sale price. This brought me to my next area of focus – encouraging her to reach out to the top agents in town. One of their concerns was that the agents were too busy and wouldn’t have time for them. Another concern was that they would be handed off to an assistant.

Top producers are extensively knowledgeable and highly self-motivated. You need expert advice and guidance in this market as things are changing rapidly. Top professionals are goal-oriented and put great effort into their service and results. Achieving success for you is a win for them. I encouraged them to be candid and transparent about their concerns and desires and see what these agents have to say. Needless to say, they called to thank me because both agents gave them more accurate and favorable numbers, which put them at ease.

“If you want something done right, give it to a busy person” is one of my favorite quotes. It holds very true when working with a professional who will help you achieve your desired results!

Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at Shmuel@approvedfunding.com.