While the headlines across the country depict an atrocious housing market, the Manhattan real estate market continues to baffle many of us. Just a few weeks ago I blogged about an open house that was attended by more than 150 people of which ten submitted bids. That apartment went to contract for nearly 15% over the asking price.
Two weeks ago, we had nearly 70 people attend an open house for another property we were marketing. That open house also resulted in multiple offers over the asking price with the winning bidder at 5% over the asking price. The unusual outcome of this multiple bid situation is that the winning bidder decided after a revisit to the apartment that they didn't want to proceed. No problem right? Wrong. Three days after the highest, best and final (see definition below) bids were received, we reached out to our back-up bidder who had offered a higher price to inform him of the good news that his bid was now being considered and the seller wanted to proceed to contract. He was no longer interested as he was negotiating on another property.
highest, best and final-each bidder is given one final opportunity to put their best foot forward and bid at the highest price with which they feel comfortable. In addition to submitting their highest bid, the best terms for the seller are conveyed to each bidder so that they can formulate an offer that appeals to the seller in both price and terms. Bidders must also submit a financial statement that discloses a complete breakdown of all assets/liabilities and income/expenses. The highest bid price is not always the best offer based on the seller's desired closing date, financing contingencies, and/or financial condition of the bidder.
On to bidder number three. Thinking that bidder number three would jump at the opportunity based on their disappointment at not getting the place initially, we were confident that we would have a deal with them. Not so fast. When notified that the seller would accept their bid, this prospective purchaser suggested that they needed to view the property again at this past Sunday's open house before proceeding. Which brings us up to date...
Yesterday, another 50 or so people came to the second open house of this property and we now find ourselves with 3 more offers over the asking price and at least 2 more coming in today before 5PM. Our hope is to accept the highest, best and final offer this evening so that we can have a contract signed by the buyer and delivered with their 10% deposit to the seller's attorney by 3PM on Friday. That's our hope but we will see how this round plays out.
In my 16 years selling Manhattan residential real estate, I have never facilitated 2 highest, best and final offer scenarios for the same property within a 3 week period. It's very bizarre and a sign of the times. Here's what I see:
- Buyer anxiety remains high
- Sellers remain in the "catbird seat" reluctant to budge in negotiations
- Financing contingencies are being requested more frequently by some buyers
- Sellers are still not amenable to financing contingencies particularly when they have multiple bidders to choose from.
- There are still plenty of ready, willing and able buyers who want to own their piece of Manhattan.
So as we all wait to see how the national housing crisis plays out in our backyard, for the time being it looks like the game goes on with similar rules and similar players as we've seen over the past decade.