Selling a home! How to get a bidding war started? (Seattle: bank owned, days on market)

[Ruth4Truth]

It's only been on the market a week. You should wait a month, and if after a couple of open houses, you don't get any offers, drop the price significantly. When a home is well-priced is when bidding wars happen, except in the Bay Area, where they happen simply due to high demand.

[Sandy Nelson]

Disneyluv,

If your home has been on the market for 5 years you won't have much chance of a bidding war, as buyers see the long time on market and consider your listing as stale. They think "if nobody else wanted this home in the past 5 years, I don't want it either". My advice to you is to take the home off the market for at least 90 days and start with a new plan, a new market evaluation and a new broker. While the home is off the market long enough for the MLS to stop counting the cumulative days on the market (in our NWMLS that is 90 days), make any repairs the home may need, work on the curb appeal and landscaping, get the roof, gutters and windows cleaned, etc.
A good broker will be able to work up a market analysis that shows where the current market value is for your home. DO NOT list above that value. Invest in home staging and quality photography (a good broker will have those areas covered). Once the home is ready to re-enter the market, all the marketing must be in place (open house the following weekend, advertising, online ads, Facebook ad campaign, cards to neighbors etc. There has to be a buzz around your new listing. If the price and condition are right, you will get multiple showings every day, as well as several offers. Here is a tip: If you get lots of showings, the home's price and the photos are attractive to buyers. If you get lots of showings and no offers, there something about the actual house or location that is not matching buyers' expectations. If that happens you must react quickly by remedying either the condition or the price, otherwise you'll languish on the market again like last time.

Best of luck!

Sandy

[Sandy Nelson]

Sorry...I misread your post and thought your home has been on the market for 5 years. Please disregard the portion of my post about taking the home off the market. The rest is the recipe for success.

[Disneyluv111]

Thanks everyone for your suggestions! We are waiting it out. I like the advice that it's not so much about the right things I need to do, but the right buyer. That really encouraged me! Thank you!

[Ruth4Truth]

"Waiting it out"?? OP, it's only been a little over a week. It sounds like you have odd expectations about how quickly a listing gets attention and serious interest. And without knowing anything about the home and its location, we can't help you gauge what to expect. Just work with your agent.

[mkarch]

Originally Posted by PS90

I apologize if this is an old redneck's attitude, but aren't things like unnecessary "bidding wars" what got the housing market into so much trouble pre-2008?

As we learned (or as I thought we had learned) in the housing bust - it's nice for the seller, and maybe even their neighbors, to have a "bidding war", but artificially-inflated house prices generally hurt buyers and other homeowners in general when prices inevitably come back down to reality.

Houses, like everything else, need to be bought-and-sold for what they're worth, not inflated by some marketing gimmick.

Ehhh... no. The reason bidding wars lead to an overheated market pre-08 was because there weren't strict appraisal and finance restrictions on the bid up properties. People could bid the price up 100K+ and finance the entire purchase (and then some).

Currently if a bidding war ensues, the buyer has to have cash to cover the difference between appraised (market) value and the loan amount. Knowing this, a seller presented with multiple offers is likely to accept one with a lot of cash on top, otherwise they risk having the deal fall through when the bid amount is well in excess of what the property will appraise for. Even in a situation where the buyer is willing to waive the finance contingency to win the bid, that won't close the deal if they don't have plenty of cash to thrown in at closing.

[PS90]

Originally Posted by mkarch

Ehhh... no. The reason bidding wars lead to an overheated market pre-08 was because there weren't strict appraisal and finance restrictions on the bid up properties. People could bid the price up 100K+ and finance the entire purchase (and then some).

Currently if a bidding war ensues, the buyer has to have cash to cover the difference between appraised (market) value and the loan amount. Knowing this, a seller presented with multiple offers is likely to accept one with a lot of cash on top, otherwise they risk having the deal fall through when the bid amount is well in excess of what the property will appraise for. Even in a situation where the buyer is willing to waive the finance contingency to win the bid, that won't close the deal if they don't have plenty of cash to thrown in at closing.

Okay...

Assuming a home is priced at market value, then a "bidding war" will necessarily inflate the potential selling price of that home - otherwise there would be no "war". Therefore, a bidding war above market value will still artificially raise the price of the home if it gets that far, which was the point of my previous comment.

Having cash/financing available is a whole separate issue that I didn't touch on.

[mkarch]

Originally Posted by PS90

Okay...

Assuming a home is priced at market value, then a "bidding war" will necessarily inflate the potential selling price of that home - otherwise there would be no "war". Therefore, a bidding war above market value will still artificially raise the price of the home if it gets that far, which was the point of my previous comment.

Having cash/financing available is a whole separate issue that I didn't touch on.

But it wasn't the bidding wars that got the pre-08 market into trouble, they were just a symptom of too much easy credit being spread around to idiots. That is an important distinction as someone that is overpaying with their own money is making a significantly different decision than doing it someone elses money, especially when they're under no obligation to pay that money back (WA is a non-recourse state).

Even with how popular bidding wars have become, they're still rare, and there's limited evidence they're driving up the price of other properties. For every bidding war property that goes for 20% over asking, there's usually 4 more in the neighborhood that weren't bid up much at all. It's going to take a lot more overbids - a LOT more - to drive up comps. Even in the hot neighborhoods, sale to list prices are hovering in the 105% range, and that's with many properties being under-priced in order to generate multiple offers.

[MarciaMarshaMarcia]

I find the idea of bidding wars to be repugnant & destructive. It pretty much wrecked California.

[PS90]

Originally Posted by mkarch

But it wasn't the bidding wars that got the pre-08 market into trouble, they were just a symptom of too much easy credit being spread around to idiots. That is an important distinction as someone that is overpaying with their own money is making a significantly different decision than doing it someone elses money, especially when they're under no obligation to pay that money back (WA is a non-recourse state).

Even with how popular bidding wars have become, they're still rare, and there's limited evidence they're driving up the price of other properties. For every bidding war property that goes for 20% over asking, there's usually 4 more in the neighborhood that weren't bid up much at all. It's going to take a lot more overbids - a LOT more - to drive up comps. Even in the hot neighborhoods, sale to list prices are hovering in the 105% range, and that's with many properties being under-priced in order to generate multiple offers.

Okay, thanks, I understand.

But still, the OP wants to "start" a bidding war - which seems like a bad thing to everyone but the seller, IMO.