The Boulder real estate market is currently characterized by low inventory and good buyer demand. It’s a sellers market. Many home buyers are finding that the houses that they are interested in buying are also coveted by other buyers. This leads to a multiple offer situation. A great situation to be in – if you are a seller. For a buyer it really stinks. To see the situation from both sides read this article.
In our area multiple offers are most often handled in this way. The listing agent receives an offer and then lets all other agents who are showing or have showed the house know that they will be presenting the offer at a certain time and day. If another offer does come in the first offering party is advised of the second offer and is offered the opportunity to revise their offer. For the buyer the information available is usually only limited to the number of offers that will be looked at. This information gap leads to much anxiety. How much should we offer? What are the other offers? Are we crazy to offer $X? Will there be another better house coming down the line that is less hassle and not priced so high? Will it appraise if we go over full price? It goes on and on and each of these questions are rhetorical.
Since I can’t answer these questions for my clients with any clarity. I rely on experience to advise them the best I can and ultimately I leave it up to them to pick a number. Sometimes we use an escalation clause to calm the anxiety a bit and to hedge an overpriced offer. In the end it’s an inexact science and the results favor the bold.
So far this year there have been approximately 362 sales in the City of Boulder. In 23% of these transactions the buyer paid more than the listing price for the property. Presumably most of these 84 transactions had multiple offers. So in an effort to bring some data to the unanswerable here are the statistics from those multiple offer situations.
- The average successful offer over all price ranges exceeded the listing price by 3.07%.
- The highest percentage paid over the list price was 12.63%.
- The average price paid over list in transactions under $300,000 was 3.13%
- The average price paid over list in transactions between $300,000 and $600,000 was 2.72%.
- The average price paid over list in transactions between $600,000 and $800,000 was 2.65%
- The average price paid over list in transactions over $800,000 was 4.63% (3.8% if you exclude
- In 14 of the 84 transactions the buyer paid $2,000 or less over list price.
- The average premium paid across all price ranges was $15,500.