We took four listings in a row and I was going to document the whole experience but it was turning into a feature-length movie. Here is the segment where we discuss the bidding war in Rancho Penasquitos, its failure, and how we handled the aftermath:
We have received ten offers on our new listing, and have entered the highest-and-best round with responses due by 3pm today. A buyer asked me yesterday at what price could he end the bidding-war nonsense and just buy the house today. I told him that I couldn’t speak for the sellers, but with this much action, I think I have $1,900,000 in the bag (list price is $1,795,000), and $2,000,000 is within sight. So it would probably take $2,100,000 to squash all the other buyers.
We were flooded with buyers today!
A constant flow of 3-6 groups at a time all to see our hot new PQ listing off the 56 and only one exit down from CCHS. Talk about a convenient location – within five minutes you can get to top-rated K-12 schools, shopping, grocery, and freeway on-ramps without hearing any road noise. Perfect!
https://www.compass.com/app/listing/13328-deer-canyon-place-san-diego-ca-92129/1278342465120164953
For homes in this location, the demand is overwhelming the supply. We’ve already received two offers over list, and we’re just getting started. The way it sounds, I think there will be 8-10 offers.
How do I handle it?
I am as upfront and forthright as possible, and I discuss how the process works with everyone:
At the end of this video, I describe how I conduct my bidding wars – it’s so simple, everyone should do it!
I had mentioned in the comments section that I showed a house on Labor Day that was priced at $2,195,000. The temperature was so hot that I literally said to my buyers that no agents would be working on the holiday, let alone writing offers, so we should have an easy path to escrow. We wrote a full-price offer and expected the seller to sign it on Tuesday.
Donna suggested that I call the listing agent to see if there were any other offers. I shrugged it off, thinking there weren’t going to be any other offers – heck, the market is dying a slow death, right?
So Donna called, and found out that there was an offer, and it was over list price.
By late Tuesday, there were SEVEN offers.
It felt like 2021 all over again as the listing agent gathered the highest-and-best offers from the contestants. Yesterday, she revealed that the decision was going to be between my buyers and one other, and that we were in second place.
We had bumped our offer to $2,450,000, and that wasn’t enough to win? Wow!
I asked her to tell me the number to beat…..and she did, and sent me the document to prove it (snip above).
Ultimately my buyers decided not to go higher. But I complimented the agent for her transparency, and told her that I wish every listing agent would do that. I guess it’s possible with blind bidding that a buyer might go wild, but we were already 12% over the list price in a non-frenzy environment. It’s much more likely that my buyers would go higher if they had a number to hit, and be able to say yes or no, rather than having to grope around in the dark trying to guess what it would take to win.
Congratulations to the seller and listing agent, and bravo – job well done.
Everyone’s asking the question – who has the answer?
Instead of pushing a Code of Ethics that is 109 years old and is unenforceable, the National Association of Realtors should do the same thing and require a similar bill of rights.
Besides, once you ban blind bidding, then open auctions would evolve naturally!
https://liberal.ca/housing/introduce-a-home-buyers-bill-of-rights/
Hat tip to Bill W.
I had a good conversation this week with the people at Doorsey, and they are well on their way to providing a sharp and effective online home auction platform that could change how homes are sold. If/when Zillow buys them and provides online auctions nationwide, agents will be wondering what happened.
This article is from November:
https://www.spokesman.com/stories/2021/nov/05/spokane-based-online-real-estate-platform-doorsey-/
Excerpts:
Doorsey, an online real estate platform founded by a group of Spokane entrepreneurs, launched this week and secured $4.1 million in a seed funding round.
Founded by Jordan Allen, Nick McLain and Matt Melville, Doorsey is an online bidding platform they say takes the guesswork out of buying a home by providing real estate agents with real-time home prices and upfront sales terms and disclosures.
“Today’s home-buying offer process is rife with frustrations for all parties,” Allen said in a statement. “Buyers and their agents want to know whether their offer can win. Sellers and their agents want to know they’re getting the best offers. And agents want to close more deals in less time.
“Doorsey solves this by allowing sellers to define upfront what it takes to win, so that buyers can compete on a level playing field and sellers can find the right buyers.”
The co-founders sought input from the local real estate community and subsequently evolved the online platform into Doorsey, which provides buyers with such things as access to home-inspection reports, sale contingencies, photos, a 3D virtual tour via Matterport and a community forum for interacting with sellers and neighbors.
Buyers can also schedule showings and view desired closing dates on the platform.
Doorsey’s listings are posted on the Spokane Multiple Listing Service and distributed through national real estate websites, including Zillow, Trulia, Redfin and Realtor.com.
Doorsey has obtained $4.1 million in seed funding – an early stage of capital investment in startups – allowing it to build-out its product, hire more employees and expand to key markets nationwide within two years, according to the company.
The funding round was led by 166 2nd Financial Services with participation from Agya Ventures, Liquid 2 Ventures and SRM Development, among other investors.
Former NFL quarterback Joe Montana is a managing partner of San Francisco-based Liquid 2 Ventures, while 166 2nd Financial Services is led by former WeWork CEO and co-founder Adam Neumann.
People say to me, “I bet you’re loving this market”, expecting that realtors are raking it up these days.
Not really.
I lost 50+ bidding wars with buyers this year who lost out to others who insanely overpaid with no regard for the comps, or because listing agents were too lazy to give everyone a fair chance. Neither of those are healthy for the market in general, yet no change is on the horizon for 2022.
I found myself in two more bidding wars this week!
The two properties weren’t the superior buys in top condition – instead, both were very average and priced with no regard for the comps. Yet they both had multiple offers over list price during the week between Christmas and New Years?
This is my 698th blog post of 2021, and the best way to review the year is to scroll through the highlights and lowlights here:
https://www.bubbleinfo.com/category/2021/
or here:
https://www.bubbleinfo.com/category/bidding-wars/
For those who like the videos, here is the full collection:
https://www.bubbleinfo.com/category/bubbleinfo-tv/
I’m off to play golf with Kayla – she extended her stay for another week! I’ll comment more later.
It never fails – go golfing and sell a house!
I only golf 2-3x per year – we should go more often!
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
