Buyer Success Story: Worth It
The charming 2-bed condo for sale was assessed by the city of Somerville for $688,000. List price? $700,000.
My buyer client Sam visited the Saturday and Sunday open houses and returned with me as his buyer's agent to see it again on Monday.
Bids due on Tuesday. Multiple offers expected. Decision time.
I completed a valuation analysis of the property for Sam and shared it with him. We talked at length. "It's properly priced," I said in summary. "The market will determine the premium."
"I would like to bid $725,000," Sam said. "Send it to me to Docusign."
Offers were due at 2 pm on Tuesday. After 5 pm, the listing agent called me to say that Sam and another prospective buyer were being invited to submit "best and final" in a second round of bidding.
Just before the new 9 AM deadline on Wednesday morning, Sam texted me: "$750,000. Write it up."
Sam's revised offer prepared and submitted. AND ACCEPTED! Sam won!
The following week, Sam's lender received back the bank appraisal report of the condo from the appraiser. It appraised for $700,000 - the list price.
Sam started to question his decision to pay $750,000 for the place.
"Why should I pay more than the appraiser thinks it's worth?" a rather rattled Sam asked me.
"The appraiser is not the ultimate arbiter," I said. "The market is. You owned the decision to offer $725,000 and to improve your offer in the second round to $750,000. This led to you securing the property in the competitive bidding process in the open market. Yes, you can still exit the transaction. But you can also decide to proceed forward."
I email to Sam additional information on appreciation in the market over time. I also review with him his own timeline and his desire to owner-occupy his next home for at least the next five years. We also go over the comparable sales again, and look as well at other sale events in the neighborhood. Last but not least, we ponder what not proceeding with the purchase would look like in terms of his current living situation. We also review once more alternative options in the market. "Sleep on it," I say to Sam.
"I don't need to sleep on it," says Sam with newfound certainty. "It's worth it. Let's do this."
Fast forward five years. Sam's Somerville condo is now worth much more than he paid for it. Sam still lives there, and he loves it.
"Yeah, sure, it's worth more now," Sam says to me. "The thing is, Charles, it has always been worth it. Because it's my home. Thank you."