Tj and the bear asked for more details on the open bidding experience, seen here:
1. Buyers and Agents Were Willing to Participate.
There weren’t any objections – people were willing to do it. I only put a note in the MLS remarks that morning, and told people who attended that we would be selecting the buyer at 3pm. Even though the listing had only been in the MLS for 24 hours, I knew we had multiple contenders ready to buy, because they surface immediately. As listing agent, I want to encourage that urgency and take advantage of it - so I started telling people right away that we were going to select a buyer at the end of the open house, and people appreciated the ‘instant winner’.
2. Does It Get Better, Later?
I don’t think it does. The evidence in this case was an offer sent over the next day for $375,000. It’s why the practice of inputting listings but not showing them until days or weeks later is so detrimental – the hot buyers cool off quickly, and it is too easy for them to move on to the next new listing.
3. The Agents.
Richard said it before we started – this will really test the agents’ ability to properly advise their clients on the fly. All the buyers were discussing with their agents thoroughout, and about half the time it was the agent who made the bid on behalf of the buyer. Agents usually aren’t willing to push their buyers, whether it’s out in the open or not, and I think they handled this well.
4. Going Direct to the Listing Agent.
Nobody asked me to write their offer in order to get a presumed edge. With open bidding, there is no edge available, other than the quality of the agent’s advice.
5. Why it Didn’t Go Higher.
The buyers and agents may have been cautious, and/or well-informed. Two of the non-winners said that they “knew the comps”, and I think it was another example of how determined buyers are to staying within a reasonable range. There were two model-match sales recently; the one on this street was $380,000 and closed September 21st, and the other was the retail end of a flipper that closed for $390,000 on September 14th. The model-match short sale a few doors down listed for $399,000 was inexplicably put into withdrawn status, instead of ‘contingent’ so it wasn’t easy to find. They moved it to contingent yesterday.
So while people were motivated enough to show up the first day and participate in an event they’d never seen before, they weren’t willing to go crazy on price. Back in the bubble era, the threat of being priced out forever seemed real – we had never seen prices dump before, and “getting in” was more important than getting a good price.
These days buyers are very savvy about the values, and are willing to let a property go, rather than pay too much. There are probably a lot of people waiting on the sidelines that will buy the dips, and any appreication will be in smaller increments and undermined by the fraudulent short sales.
I was happy to get the $411,500, which is 5% more than the highest recent sale. I think it shows that the open bidding/transparency package is a viable way to achieve top dollar.