Redfin‘s Dario Medina and Mark Reitman stopped by my office the other day for an off-the-cuff discussion of Redfin’s business model and some of the trends its agents have been seeing recently in the Chicago real estate market.
One topic I tossed out for discussion was multiple offers. According to Medina, 37% of Redfin’s local transactions in April involved multiple offers. That’s a number that many may find surprising.
According to Medina, multiple offers are especially common on well-priced, quality property in the New Trier school district communities of Wilmette, Winnetka and Glencoe.
One aspect of Redfin’s corporate culture is an obsession with metrics. In a follow-up email I learned that Chicago’s percentage lagged San Francisco and DC, where 81% and 45% of Redfin deals, respectively, involved multiple offers. From March 16 to May 16 of this year, 545 Chicago-area homes sold for more than 10% above the list price.
Reitman reported that Redfin has developed a 35-point plan to assist their clients in improving their chances of a winning result in multiple offer situations.
Dario Medina is Redfin’s Chicago Area Manager. Mark Reitman is Redfin’s Central US Regional Director.
Tried an escalator clause in a recent contract on a short sale. Needless to say, the seller’s agent did not understand the language of the deal and was concerned that the buyers would not sign-off on the highest price. Obviously the sellers didn’t go for it and demanded best and final offer.
Escalator clauses are a solid strategy, but both agents need to be familiar and comfortable with that language and structure, otherwise it does not work.
Great post as always Joe.
Great video/post! I too am seeing an astonishing number of multiple offers and well-attended open houses. I was contacted by a Chicago Tribune reporter and I also said buyers are astonished to find that they are not the only ones in the game. http://www.chicagotribune.com/business/ct-biz-0523-condo-sales–20120522,0,1189904.story
Regarding escalation clause, I agree with Dan – I used this in the boom boom 90’s and it was not at all well received by the listing agent who did not understand it. Years later, when it became more wide spread, she later apologized to me. I would love to hear more feedback about this technique from others. Thank you!