How Our Offer Beat The Others But Wasn’t The Highest Bid

Kinaya, who is a an alumni of the Islander Ohana, asks:

I heard that a home was closed even though the offer was not the highest. Can you share some details about that story?

This short clip came from our Aloha Friday Hawaii Real Estate Show which goes live every other Friday on our Hawaii Real Estate YouTube channel or our Living in Hawaii Facebook page

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Show Transcript:

someone in the cohort said that they had
closed on a home due to scott’s
relationships in other words the deal
was closed even though the court member
didn’t make the highest offer i wonder
if scott can share anything scott i
think we know who uh akanaya is is
referring to can you tell us a little
bit of a story i recall that you you
helped them find a condo and uh but they
weren’t the highest they weren’t the
highest bidder uh but they got the they
got the house anyway how did that work
and why is it this is this really
underscores why the relationships mean
everything go scott
yeah so i i would more put it this way i
mean it’s i i educate the clients um
just like we’re doing here it’s a very
honest conversation and a strategic plan
and we get prepared and we get ready um
for for being able to put in offers and
and i’ve been doing this for almost 20
years and i do networking events and
things like that to build those
relationships with other realtors within
the community
um and
you know so i have respect in the
it’s not necessarily about me and my
relationship we obviously have to be
competitive in price and terms and
things like that but that’s part of that
education and that planning process so
when we submitted the offer i had the
conversation with the other agent that
i’d done a deal with six months ago and
we both have a high respect for each
other and how
we conduct our business and carry
ourselves and things such as that and
and the lender that i was working with
on this deal
he’s worked with her as well for almost
20 years
so just that combination the sellers
wanted to sell there were six sellers
and we weren’t the highest price and we
didn’t have the the biggest down payment
and we didn’t have the biggest appraisal
clause but they chose us because because
of the relationships that we
he knew i had prepared my client is
essentially what it got to so he knew
that my client was making a sound
decision but when putting in that offer
so they were comfortable being able to
accept that contract
so you know i want to just kind of go
just to dig a little bit into that scott
uh because so what i’m what i’m what
here’s what i’m hearing right what i’m
hearing is that okay it wasn’t
financially on paper it wasn’t the best
it wasn’t that you know the highest
etc but you got the deal anyway and it
wasn’t because of your striking good
looks that you got the deal although you
do have striking good luck especially
especially when you wear those cool
uh but it was it to me it sounds like
because of the relationships because of
the of the of the trust that of this
network the seller inevitably must have
felt that this was the best deal for
them to take despite the fact that may
not have been the highest deal or
whatever this was the best deal for them
net wise in terms of pain in terms of
ease of transaction and ease of close
all those things all added up to this
was the best deal it’s not just about
the money there’s a lot of other things
and those other things need
relationships to come out that’s kind of
what i’m catching
yeah exactly the listing agent went to
bat for us this is what it came down to
and it was because because all that
because of the experience and and things
now you know we kind of touched on this
topic last week a little bit on the at
our last show when we we talked about a
sort of us a survival guide to the
current market heidi was not there so i
kind of wanted heidi i want to ask you a
question is that you know one of the
things that we brought up at the last
show was that and scott just kind of
re-illustrated that the importance of
relationships and why you’re really
going to want to work with somebody
who’s got a good network and kind of
built up do you i hate to put you i
don’t want to put you on the spot heidi
but you’re pretty good about that this
kind of stuff
do you have a story what’s this can you
bring us uh give us a story heidi of of
a transit of a recent transaction that
you closed just to give us some some
context in terms of look it doesn’t have
it’s not just based on price alone
there’s more things that go into that
and you can you can win a a you can get
a you can buy a home
with a good network of relationships it
doesn’t have to be the highest bid all
the time can you give us a story that
from your own personal experience of
something that you know about that
illustrates that idea
well i think
what i can share is kind of why that is
too because i mean your first thought
might be well why wouldn’t the seller
just want the highest price
for the seller there’s also
an added cost in a transaction when they
pick the wrong offer
and then that buyer is difficult to deal
with or that buyer cancels and then they
go to another buyer and then that buyer
cancels and then people start to think
something’s wrong with the property
and i’ve definitely had that happen
i’ve experienced this on maui where um
where i feel like my my buyer’s offer
was selected because
they knew that i was educating the buyer
about the property and had experience
selling at this property um
especially with oceanfront properties
and vacation rentals i mean sometimes
people are looking online they’re not
really familiar with what they’re buying
and then they get in contract and cancel
and that can cost the seller time and
money too so i mean that’s why it is
really important
from a seller’s standpoint to look at
not only the price and terms but how
educated are these people about the
property how likely is this transaction
to going to close because that
um benefits the seller in the end
so i mean i think that’s why it’s really
you know actually something that you
just brought up maybe uh made me realize
some that dylan has mentioned several
times which is that the the the hawaii
the standard contract for real estate in
significantly favors the buyer the buyer
can basically kind of back out you know
kind of anywhere along the way so i can
definitely see huge value this kind of
really ties it in for me now i just got
my big aha moment here that you know
knowing if that if the seller
knows uh the other the buyer and the
buyer’s agent and they know that they
that the buyer’s agent has educated the
buyer which means that their chance of
backing out of the transaction is low
that’s got more value than just the
price because you could always back out
but if you’re if you’re working on the
other side and you know it’s going to be
solid it’s a solid off or you’re not
going to back out on it that that kind
of really changes everything dylan is
there anything you want to add to that
to this conversation
yeah a couple of things um you know one
uh i think it was a week ago my brother
wrote an offer
um on a house that had 10 10 offers and
got the offer accepted you know mainly
based on writing a good offer but also
having a relationship with that that
listing agent because in a multiple
offer situation for a seller
it’s an overwhelming situation right you
got 10 14 page offers to look at with
all of these different terms
they’re in the most cases they’re going
to trust their listing agent right and
they hire that person to help them and
trust their advice and all things being
equal they’re going to rely on that
person’s advice to tell them which offer
is the best one
because they’ve looked at them and
compared them and so
it doesn’t always come down to price and
even if it does sometimes when you have
a good relationship with the listing
agent that listen agent will come back
to you if they want to work with you
instead of somebody else and say hey if
you guys will increase your price by 10
we’ll go with you you know and and then
you can go back to your buyer and say
hey if it’s a 900 000 house i mean 10
grand is not a lot of money in the grand
scheme of things right if you really
want that house and they might give you
a tip on what you got to do to modify
your offer to get selected so those are
the kind of things that can make those
small differences when you’re in a
crowded busy you know crazy multiple
offer situation and a staff that
illustrates this right is
this just came out
91 of real estate commissions are
collected by the top 50 of realtors
right so the bottom 50 of realtors are
fighting over 9
of the of the real estate commissions
and so what that means is is that when
you’re in that bottom 50 percent nobody
knows who you are or what you do or even
if you do it full-time because there’s a
lot of people that you know have a
license that may do one or two deals a
year so
the reality is a name on the bottom of
your contract of who your realtor is
matters i mean that’s one that’s one
it’s one of the many things in the
contract that matters but when you’re
somebody that the
other agent on the other side knows
likes and trusts and knows it’ll do your
job right that you don’t have another
full-time job and you’re not going to
answer the phone and do the inspections
meet the deadlines and all the things
that got to happen through the process
that stuff makes a difference so
absolutely absolutely the the
relationships can can be a determining
great uh great story so so can i we we
did an extended discussion for you on
that one i think it was a great question
can i that that you had i appreciate
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