Selling a home! How to get a bidding war started?

[Ira500]

If you want to start a bidding war, you can't generally do that unless your property is in a place where the real estate market is hot. For example, it's not hard to get multiple offers on a house in Ballard. It's much harder to get a bidding war going in Everett.
Also, if you want to get a bidding war going, that's a strategy that should be employed before the house goes on the market.
In any event, do whatever you can do to make the house as attractive as possible. If the house is next door to the freeway, or a halfway house for child molesters, there's not much you can do. But making it as clean and pretty as possible never hurt.

[mkarch]

Originally Posted by PS90

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.

I guess it depends on how you look at it. The properties that tend to generate overbids are usually move in ready, fully remodeled, modern and in areas where most of the homes are not. These kinds of properties have been in short supply for at least 4 years. They're actually more plentiful now than when I was in the market 3 years ago, but there are more buyers now as well. People who can end up paying a premium for this convenience. It's their money and if that's what they want to spend it on they're free to do so whether or not most other people see the point in it. In most cases these same buyers *could* find a grungy old fixer upper for under $600K and spend a year remodeling it but then they wouldn't be getting in bidding wars over finished properties.

[PS90]

Originally Posted by mkarch

I guess it depends on how you look at it. The properties that tend to generate overbids are usually move in ready, fully remodeled, modern and in areas where most of the homes are not. These kinds of properties have been in short supply for at least 4 years. They're actually more plentiful now than when I was in the market 3 years ago, but there are more buyers now as well. People who can end up paying a premium for this convenience. It's their money and if that's what they want to spend it on they're free to do so whether or not most other people see the point in it. In most cases these same buyers *could* find a grungy old fixer upper for under $600K and spend a year remodeling it but then they wouldn't be getting in bidding wars over finished properties.

I still don't see how a "bidding war" is not a bad thing for the population in general. If a person is selling a nice, move-in-ready, desirable house - then the market value of that house should already be on the high side compared to similar houses in less desirable areas or houses in poorer condition.

So, therefore that house should already be priced at a much higher price than other houses. If the seller wants to start a "bidding war", then by definition that means buyers are competing to obtain the house by offering ABOVE AND BEYOND the selling price - which, again, should already be at market value. So by definition, a bidding war will artificially raise the home value.

The only way a "bidding war" would not result in an artificially high home value is if the seller priced the home at lower than market value just to get a bidding war - which to me seems pointless and a waste of effort.

This whole thing pushes values too high, which in turn leads to higher and higher real estate prices. This is nice for the seller, and maybe their neighbors who might benefit from higher property values in the area, but bad for people buying homes and very bad for homeowners in general when prices fall - as they did in 2008.

FYI, I am not a realtor, and do not benefit from higher sale prices on houses...

[Ira500]

Originally Posted by PS90

I still don't see how a "bidding war" is not a bad thing for the population in general. If a person is selling a nice, move-in-ready, desirable house - then the market value of that house should already be on the high side compared to similar houses in less desirable areas or houses in poorer condition.

So, therefore that house should already be priced at a much higher price than other houses. If the seller wants to start a "bidding war", then by definition that means buyers are competing to obtain the house by offering ABOVE AND BEYOND the selling price - which, again, should already be at market value. So by definition, a bidding war will artificially raise the home value.

The only way a "bidding war" would not result in an artificially high home value is if the seller priced the home at lower than market value just to get a bidding war - which to me seems pointless and a waste of effort.

This whole thing pushes values too high, which in turn leads to higher and higher real estate prices. This is nice for the seller, and maybe their neighbors who might benefit from higher property values in the area, but bad for people buying homes and very bad for homeowners in general when prices fall - as they did in 2008.

FYI, I am not a realtor, and do not benefit from higher sale prices on houses...

Interesting points.
A couple of thoughts: High house prices are not good for the neighbors, unless the neighbors plan on moving. Instead of benefitting from the higher prices, neighbors will pay much higher property taxes.

The bidding wars that we're seeing lately in Seattle is mostly a function of very low inventory. When there is a healthy economy with people coming here for high paying jobs, and you combine that with very little for sale, it creates frothiness. Good for sellers. But not necessarily good for listing agents, because there are a lot of real estate agents and not a lot of houses for sale, and not good for buyer's agents, because their buyers have to compete with multiple other offers.

[Ruth4Truth]

Originally Posted by thisplacesucks

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

True. (Couldn't rep you.) Also, the OP may not be in a good location for a bidding war, no matter what price she puts on her place. Or the house simply may not warrant it, depending on style, condition of the property, etc., all of which we know nothing about.

[Ira500]

Originally Posted by Ruth4Truth

True. (Couldn't rep you.) Also, the OP may not be in a good location for a bidding war, no matter what price she puts on her place. Or the house simply may not warrant it, depending on style, condition of the property, etc., all of which we know nothing about.

Exactly, Ruth. We know nothing. The house might be in Dipthong, Nebraska, which just offshored it's only jobs overseas. Or it's a former meth lab. Despite every home seller on earth's wishes, not every home for sale is going to attract buyers, let alone a bidding war.

[mkarch]

Originally Posted by Ira500

Exactly, Ruth. We know nothing. The house might be in Dipthong, Nebraska, which just offshored it's only jobs overseas. Or it's a former meth lab. Despite every home seller on earth's wishes, not every home for sale is going to attract buyers, let alone a bidding war.

But it could be a meth lab in Ballard, in which case it is probably as good or better than an ADU.

[StealthRabbit]

pristine home in desirable location that says "You MUST buy ME!" is best you can do.

Takes more than one buyer to bid 'up'. Quite rare, but happens in some markets. It complicates the sale and is not desirable for buyers / lenders / appraisers.

A home that is priced too high is a bad start.

What is 'average days on market' in your MLS district and price range? (this is something you should know BEFORE listing your home.)

[Ultrarunner]

Bidding wars happen when the property is listed at a very attractive price for a certain period of time... maybe 10 to 14 days.

At which time all offers received will be opened/considered...

I got almost sucked into one with a property that was Bank Owned...

It was on the market for a low price for 14 days... 17 offers in proper format were received... all 17 were invited to resubmit the highest and final offer... Wells Fargo had about a million owed when if foreclosed.

It most definitely did stir up a bidding frenzy... I did not bother to re-submit because I had made my offer.

The home was listed for 560k and sold for 800k and after 23 months sold last year for 1.25m...

and such is Bay Area Real Estate today... almost every property has multiple offers... not always higher offers...

Property that is price above market get quietly withdrawn... once the shine is off the bloom it becomes stale...

[M3 Mitch]

Originally Posted by Disneyluv111

Home has been on the market for 5 days. Now I'm wondering how to get a bidding war started? Drop the price to a reasonable one and let the offers come in? Or is there something more to it.

The most important thing is location. You need to start with a good location.