Slow-Motion Auction Underway

There is no guidance on how to effectively handle a bidding war.

I don’t see or hear anything from NAR, CAR, brokerage managers, or team leaders on how listing agents should handle a bidding war, other than to put the offers on a spreadsheet and let the seller decide. But they are paying us a lot of money to give them advice, and that’s all we got? Embarrassing.

For realtors who think that’s good enough, then fine. Do you mind hurrying up with that retirement?

I made an offer on behalf of buyers last Thursday that was 6% over the list price. The listing agent won’t tell me how many offers they have, what price they are at, or even how the winner will be determined. After five days of waiting, we are left with nothing except “I’m trying to get you a counter” that came last night.

It never occurs to them that their inaction for days causes the buyers to cool off in the hurry. The agent will finally get around to picking a buyer they like, and the home will finally sell. But it won’t be for top dollar.

When I receive multiple offers, I’m transparent with everyone.

With our Cedarcrest listing, I’ve been telling every buyer and agent exactly what to expect. I encourage all of them to make a written offer, we will request their highest-and-best offer on Monday, and then find the winner on Tuesday.

Once the offers are in, usually half of them won’t submit a highest-and-best because they already did, or they cooled off quickly. No problem, and thank you for your offer.

We’re up to nine offers now, yet only two or three have expressed their sincere desire to buy this house. What a great filtering system to find the real players! Once I’ve confirmed with every agent that their highest-and-best offer has been received, I ask them if they want to go any higher – and tell them that if they don’t they are going to lose.

The efficiency is spectacular. The buyer-agents have the intel they need to literally tell their buyers, “If you don’t go higher, you’re going to lose out”. Every buyer would like that clarity in which to make a decision – yet every other listing agent thinks it’s better to keep them guessing in the dark for days.

A few will be startled by the transparency because they have never seen it before.

They think they deserve some favoritism because they are a cash buyer, or because they were first, or because their agent is a sweet-talker…..but what they really want is to score an off-market deal at a lower price because they see a lot of those happening – and they’ve never seen anything like mine.

Another agent asked about the action because she has a new listing coming in the neighborhood that is on the canyon side. She got what she wanted out of me, but then wouldn’t tell me anything else about hers, other than, “You’ll see it when it’s on the open market”. Great – we’ll see how she does vs. me!

4:40pm:

NSDCC January Update

After a disappointing number of sales last month (87, the lowest monthly count ever), January is poised to reach 100+ sales. There are 128 houses in escrow today, and 39 of those were marked ‘pending’ prior to January 1st so probably 20+ of those stand a good chance of closing by the end of the month:

NSDCC Monthly Sales

Although the severe drop in sales recently can be attributed to higher mortgage rates, higher prices, etc., you can’t sell what’s not for sale:

NSDCC January Listings

With the number of listings up to 183 this month, we should reach the 205 listings we had last January. Will the last few people on our list still have a fighting chance, or should we hand the Padres tickets to Joe?

Here are the contestants:

Contest to Guess the Total Number of NSDCC January Listings

142 Anne M

157 Skip

160 doughboy

170 Dale

174 SurfRider

176 LifeIsRadInCbad

180 Kingside

188 Stephanie R.

189 Chris

190 Tom

192 Sara G.

196 Derek

200 Curtis

208 Rob Dawg

210 Bode

213 Shadash

217 Nick

222 Majeed

223 Joe

With slightly more inventory, similar pricing and rates, and pent-up everything, the 2024 Selling Season should be as hot as it was last year. This week, I had buyers survive an 8-offer bidding war and win by submitting the now-customary $100,000+ over the list price, and there have been crazier sales already:

Eleven Offers!

We’ve received ELEVEN offers on our new listing at 7114 Columbine!

The five cash buyers have declined to go any higher, so the six financed offers will be competing today for the win. We sent all of them a highest-and-best counter with a 4pm deadline today. Meanwhile, any other agents who want to show and sell are encouraged to do so – we don’t stop the showings or offers, like most agents do.

We’re already $100,000+ over the list price!

Bidding Wars, 2023

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.

Saturday Open-House Report

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:

Transparency is Appreciated

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.

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