With painfully few homes on the market and the “sweet” Medford Colonial the perfect place to raise the baby they are expecting, Elizabeth Deutsch and Brian Rosen were determined to vanquish the competing bidders. Not only did they offer $11,000 above the asking price, but they wrote the couple who owned the home a personal note. “Dear Caleb and Autumn,” it began.
Small problem: Lisa, not Autumn, is the name of Caleb’s wife. Autumn is their dog, a boxer-terrier mix : beloved, but not a decision-maker in real estate matters.
“They got the place anyway,” said their broker, Ed Greable of Keller Williams Realty. “The owners got a laugh out of it.”
You would be cheerful, too, if you were a seller in spring 2013. And if you were a buyer, you might also be writing nice notes to sellers.
With inventory down and prices rising, buyers are exhibiting the kind of frenzied behavior not seen since 2005. It is not enough that they are mobbing open houses, bidding thousands of dollars over asking price, and making all-cash offers. They are going so far as to Google owners and craft pitches in which they pretend to enjoy the same things the sellers do. Family photos are not uncommon.
“The garage would be a great place to store my kayak,” one aspiring buyer, a nonkayaker, wrote to a kayaking owner. Some would-be buyers linger at open houses to eavesdrop on the competition. Greable said one client regularly called him from packed open houses. “The vultures are here,” she would whisper.
Some buyers are taking risks that few lawyers would advise, like offering to waive mortgage contingencies and home inspections.
As word spread in Jamaica Plain that Tanya Contos’s Colonial might be going on the market, strangers began ringing her doorbell. “It was like trick-or-treating, but for houses,” she said. “They were slipping notes through my mail slot.”
Oh, the notes. The vast majority of home sales come down to money, but that has not stopped buyers from writing memoirs explaining why they — and not the 50 interlopers at the open house — should be awarded the property.
“I just had a listing in Arlington that got 15 offers, all over asking price [$449,000], and nine people sent letters,” said Julie Gibson, a realtor with Bowes Real Estate in Arlington.
A line from the winning letter: “The yard is gorgeous and so family friendly for grandchildren.”
The letters are a ploy resurrected from past competitive markets, but do they work?
“When you have five people writing similar letters telling the same story about how much they love the house, what does that become?” asked Gary Rogers, a past president of the Massachusetts Association of Realtors. “Junk mail.”
A homeowner selling because of divorce or some other life change may not want to hear about a buyer’s charmed life, added Rogers, a broker in Waltham.
“I had a family who was just going on and on about how their kids were going to such-and-such college and the great grades they were getting, and one of the seller’s children is flunking out of high school.”
But suitors can get desperate. And buyers are facing daunting numbers.
In a snapshot of the market taken on a single day in April, the most recent statistics available, there were 21,919 single-family homes for sale in Massachusetts, down from 30,066 in April 2012, according to data from the Massachusetts Association of Realtors. The number of condos for sale dropped from 10,396 in 2012 to 7,024 in 2013.
With supply low, prices are rising. The median price for a single-family house was $315,000 in April, up from $284,950 in April 2012, according to figures from the Waltham-based real estate association. The median condo price rose from $275,000 in April 2012, to $285,000 this April.
Interest rates fell from a national average of 4.2 percent for a 30-year fixed mortgage in April 2012 to 3.69 percent in April, but rates are inching their way back up, the realtors association said, giving many potential buyers the feeling that now is the time to pounce.
With multiple offers increasingly common in sought-after communities — a four-bedroom home in Lexington recently drew more than 20 bids — and many homes selling at the first open house, buyers can feel pressured to make the biggest financial decision of their lives in less time than some people spend buying a television. The pressure to act is reportedly increasing cases of buyer’s remorse and with it the incidences of homes that were under agreement returning to the market, said Rogers, former president of the state Realtors Association.
The competition is also forcing buyers to take risks. Consider what happened on a Sunday in April when 60 buyers mobbed the open house for a $420,000 two-bedroom, two-bath condo in Somerville and people started filling out offer forms on the spot.
“Everyone was asking what the sellers wanted,” recalled Joe Schutt, broker-owner of Unit Realty Group in Boston. The ideal offer, he said he told them, would be lots of money and because the place was currently rented, permission for the tenants, a family of four, to stay on for a few months. The winning bid was $31,000 over asking and included the renters.
“It’s incredible,” Schutt said, adding that lawyers almost always discourage such an arrangement. “You can get stuck with people who won’t leave.”
One realtor likened the open-house scene to the old Filene’s Basement wedding dress sale. But even sellers can have problems.
“We were warned our condo might sell fast, but we didn’t think it would be so quick: It sold the first weekend,“ said Meghan Lacoche, formerly of Belmont, now living in temporary housing in Brighton.
After losing out on a couple of other houses, she and her husband finally found a nice Colonial in Hopkinton for their family of four, but they do not close until the end of the month. “All of our furniture is in storage,” she said. “It’s like we’re camping. We just have mattresses.”