You know there are agents out there thinking, “Jim, you sniveling little baby – why don’t you just get your buyers to offer more money so they can win the bidding war?”
First off, a bidding war is when participants are bidding against each other.
What is practiced around here is blind bidding, where buyers just guess at what offer might win.
Nobody wants to pay more than they have to, or more than they should. With no other influence, buyers will submit their bid based on the comps, or their comfort level.
But when presented with a price to beat, emotion takes over. With the fear of losing the property being a real possibility, buyers are much more likely to go higher than they originally thought, in order to win.
It becomes more about winning and losing, than paying a comfortable price.
There will be an occasional blind bid that swamps the boat, and produces a sales price that others wouldn’t have touched. But how do you know? You don’t.
Conducting an auction-like process where bidders are pitted against each other and know the number they have to beat is the most reliable way to reach top dollar. The fear of loss is real, and motivates people to do things they wouldn’t have done on their own.
Yet, realtors around here won’t consider! Why not?
Most everyone thinks it’s against the rules, but this is in the contract:
Offers not necessarily confidential: Buyer is advised that seller or listing agent may disclose the existence, terms, or conditions of buyer’s offer unless all parties and their agent have signed a written confidentiality agreement. Whether any such information is actually disclosed depends on many factors, such as current market conditions, the prevailing practice in the real estate community, the listing agent’s marketing strategy and the instructions of the seller.
Agents can include the confidentiality agreement but it doesn’t mean anything unless all parties agree.
In my bidding war on Saturday, the agents were happy to participate. They enjoyed the transparency, and the chance for their buyers to determine their own fate!
Sometimes it’s easy for homeowners to make the decision to move, and for others it takes careful deliberation to come to the right conclusion – and it’s relative to how much they love their home, and if they can do better. It took months of discussion to decide to let this one go – it’s a trophy property!
1463 Paseo De Las Flores, Encinitas 92024
4 br + den/4.5 ba, 4,318sf
LP = $3,395,000
SP = $3,760,000
Once Jim received two cash offers, he masterfully pitted them against each other. After five rounds of open bidding, the first offer prevailed at $3,760,000. All other agents would have just grabbed the highest offer and gone back to sleep – but Jim’s slow-motion auction added an extra $260,000 to the seller!
Breathtaking ocean & golf course views from this former model home that has been extensively remodeled and upgraded! Newer kitchen has polished quartzite counters, Wolf appliances, built-in Sub-Zero fridge and dual dishwashers too! Gorgeous bleached-oak hardwood floors throughout the home, including the four en-suite bedrooms plus office and theater room – and just wait until you see the richly appointed primary suite! Live the coastal lifestyle right on the golf course!
I mentioned the cash offer we made on Saturday on behalf of buyers hoping to purchase a home in Carlsbad. It finally came to a conclusion last night.
It went the same way all of the other multiple-offer situations have gone:
It dragged on for days.
Little or no communication.
No transparency about the process or how a buyer will be selected.
No open bidding.
After a day of being kept in the dark, I suggested to my buyers that we should improve our offer and just hope for the best. We submitted a new offer above the list price, 14-day closing, and free 30-day rentback. A worthy offer!
I got the call late yesterday – Sorry, we’ve gone in a different direction.
I appreciated the call because they usually come by text so the listing agent doesn’t have to offer any explanations. Because I had the agent on the phone, I pleaded with him to give me the winning sales price, which he did.
When I told my buyer about the winning bid, he said,
“I would have paid that.”
“IN FACT, I WOULD HAVE PAID MORE THAN THAT.”
It’s not just about treating all buyers and buyer-agents fairly (part of the Code of Ethics).
It’s about LEAVING MONEY ON THE TABLE, which is happening everywhere because listing agents are too lazy or inexperienced to conduct a proper bidding war. Even if you don’t have the guts to do open bidding like I do, then at least give every buyer a chance to make their highest-and-best offer, which used to be the standard up until this year.
Now, the listing agents only worry about grabbing their favorite offer, and going back to sleep.
The NFL added a 17th game this year, and pushed back the Super Bowl to the second weekend of February.
It will be about as long as buyers can wait, and the following weekend should be gang-busters.
If you’re not putting your home on the market in the next 2-3 weeks, then February 19th would be a good target date for listing your home for sale.
“Oh Jim, wouldn’t it be smarter to wait until momentum builds with other comps closing escrow, and then sell in April/May and pick up an extra 5%?”
Sure, if you’re a gambler.
What could go wrong:
A couple of neighborhood fixers sell for less.
Another sells to an ibuyer based on those prices.
Another is getting divorced and quick-sells their house based on those new comps.
If you get submarined by other sales nearby, then you’ll just be happy to get what you could have gotten in February. The worst part will be your spouse telling you repeatedly, “I told you we should have sold sooner”.
Yes, the frenzy will last into 2022, and you will sell for a ton of money no matter what. But I’ve gotten more inquiries this month about selling a home than any month this year – people are preparing to go!
Zillow did get around to updating their Estimated market value after a few days. They kicked up the zestimate by $633,200 to get within 0.18% of the list price – and they are still wrong!
It is incredible how much faith and confidence the consumers put in their zestimate’s accuracy. But after years of being the source for the one-click home valuations – and consistent re-marketing by email – people believe it.
Zillow says their zestimate is within 1.9% of being right on price with the on-market homes, which sounds really good until you realize what that means – they just change the zestimate once a home gets listed…..and they brag about that? They hope you don’t notice.
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