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Can you Guarantee Multiple Offers? A Bidding War!

Is it possible to create a situation guaranteed to create a multiple offer Bidding War?  Can you artificially price the property to attract at Market Value and above Offers? 


The Toronto real estate market continues to inflame the talking heads screaming about the "end of times" and collapsing values.


Interest Rates will rise but are flat.  Rates have move from 2.5% Variables to Buyers selecting 3.15% five year terms. Has inventory [the number of detached homes in central Toronto] increased? New Buyers arrive every month both from job migration in Canada and those new to Canada. Seniors are not in a hurry to downsize. All this adds to the competitive mix.


When pricing a house we take into consideration; proximity to the subject property [your house] How recently the sale occurred, How many improvements and upgrades had been made to that home and ultimately demand for that property in Bloor west, Roncesvalles Village or will you live west and drive from the Kingsway or Markland Wood. See Comparable Market Evaluation.  Access to transit and community have moved up in importance compared to commuting times, gasoline prices and traffic.


So, If we price this property within 2% of where we expect the offers to conclude, and we select a price that is a rounded number [online shoppers are looking for $600 to $650; not $628 to $647,888.]  Do this and you have missed an entire buyer category that may have looked at you but you did not round up or down to catch both the upper and lower limits.  


Some are creating hype in the neighbourhood with POCKET LISTINGS, signs that tease with Coming Soon. This is all to attraction more drive by traffic before the event occurs. Now lets hold offers for 3 or four days prior to examining all the Bidders.  What if Others are making Bully Offers;  take me now. You may not get it later. 


Are the Buyers falling for this?  Or Do you as an informed consumer say; "That house is priced $100,000 below the last sale. I know there will be a bidding war and I will not go that far past their expectation" . I have also had and advocate the "There will be another house equally suitable."  Remember, Why you are buying this house, your own home and the comfort it provides.


Some SELLERS have an expectation that sealed bids will somehow appear in their mailbox at 10:00 PM at night.  Drivers (REALTORS) will stealthily approach and drop their 11 page document with a Confirmation of Representation and You have seen my Offer and rejected it page. SERIOUSLY. Some doors no longer have a mail slot. This is simply not happening. Agents call and Register their offer with the Listing Brokerage.  Offers are presented (usually in person) in the order of registration.  Enough copies are on hand for acceptance and signatures. 


The agent has a responsibility to present all offers to you. You have the option of Signing back, rejecting or accepting the offer. Sometimes you have good offers on the table and your agent sends them all away for a final round [to top up your best bid] and no one returns.  Sometimes the appointed offer time arrives and passes, unanswered.


Can you create a Bidding War?   Although there may be multiple potential buyers for that property, each house is unique and may just not create that multiple offer scenario.  You are better off pricing the home properly for sale, than undervaluing your largest asset hoping for enthusiastic Buyers.  Most of all remember, Your home must pass inspection and appraisal post the sale and prior to closing.


Lets Talk 

 

David Pylyp

Etobicoke Real Estate Agent

Accredited Senior Agent for York Peel and Halton Regions

Lives in Toronto and promotes Giving Value

As we move forward It would be good if you also circled me on Google +
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Comment balloon 33 commentsDavid Pylyp • October 25 2013 10:49AM

Comments

It still stands, if you price accordingly, you'll drive more traffic to the listing. The more people that want the property, the higher the price could rise.

Posted by Suzanne Otto, Your Montgomery County PA home stager (Six Twenty Designs) almost 7 years ago

Thank you Suzanne Otto!   Exactly my point!   Your reputation as a Local Realtor and Neighbourhood Specialist is based on the ability to attract all possible buyers to a property in a reasonable length of time.

 

Here's to your continued success in Montgomery County PA

Posted by David Pylyp (RE/MAX Realty Specialists Inc.,) almost 7 years ago

I totally agree, but being the Buyer's agent is the bad side of the deal. You put in an offer and 9 out of 10 times it's a deal lost to another buyer. It's tough and frustrating, but definitely a smart idea. Pricing is the KEY!!!! 

Posted by Christina Laidley, I am the Key to the Home of Your Dreams! (La Rosa Realty) almost 7 years ago

Just because multiple offers come in doesn't mean the price goes up. Besides it still must appraise, at least in my market there aren't 100s of cash buyers running around.

Posted by Than Maynard, Broker - Licensed to List & Sell - 405-990-8862 (Coldwell Banker Heart of Oklahoma) almost 7 years ago

Price is usually the determining factor, but as Than stated, the seller better hope it will appraise at the elevated price if there is a bidding war!

Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) almost 7 years ago

Pricing low can generate a lot of interest and can result in a bidding war, but that's a pretty big risk to take, especially during the autumn slow down.

Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Samsel & Associates) almost 7 years ago

David, I have been involved with several multi-offer scenarious this year and coming in over list price was the winner.  Not just because of the amount because they were all over the list price but in this case because they did not ask for closing costs to be paid which made it just a little bit better in the sellers eyes.  I also have found that dropping prices on a weekly basis can also trigger multiple bids when we hit the market price.

Posted by Kelly Young, Colorado Springs Real Estate ~ 719-226-0126 (The Platinum Group Realtors) almost 7 years ago

Really depends on the wishes of the client, but I agree that pricing a home within the market range is typically the best bet to hit the sweet spot and have a shot at multiple offers.

Posted by Jay & Michelle Lieberman, Creating Calm in the Buying and Selling Chaos (Keller Williams World Class) almost 7 years ago

You have raised a lot of important points that should be explained to every seller.

 


"Can you create a Bidding War?   Although there may be multiple potential buyers for that property, each house is unique and may just not create that multiple offer scenario.  You are better off pricing the home properly for sale, than undervaluing your largest asset hoping for enthusiastic Buyers.  Most of all remember, Your home must pass inspection and appraisal post the sale and prior to closing.

 
Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) almost 7 years ago

Than Maynard makes a very valid point!   Its the cash buyers that want the "PRICED SHARP" deals and those financing are dependant on an appraisal.

 

Thank you for your comment

 

Posted by David Pylyp (RE/MAX Realty Specialists Inc.,) almost 7 years ago

Kelly Young makes a good point that in her market the OVER ASKING PRICE are the ponly winners of Multiple offers;  But what if the asking price is also over in flated with space for OH...   Negotiation, Closing Fees and UMM Real Estate Commissions.

Thank you

 

Posted by David Pylyp (RE/MAX Realty Specialists Inc.,) almost 7 years ago

 

Joy and Michelle Lieberman make the strongest argument; It is all up to the Sellers how things are handled.

Thank you for responding.

 

Posted by David Pylyp (RE/MAX Realty Specialists Inc.,) almost 7 years ago

The basic laws of business are always consistent, it's all about supply and demand and the price of the property will certainly get attention even when there is less demand

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) almost 7 years ago

I'm with Ed and can'tsay it better. :)

 

Love and light,

Laura

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) almost 7 years ago

David, thanks for an excellent discussion about bidding wars. A very informative blog.

Posted by Ralph Gorgoglione, Hawaii and California Real Estate (310) 497-9407 (Maui Life Homes / Metro Life Homes) almost 7 years ago

David, multiple offers cannot be guaranteed - even when we feel the price is '2-5% below market value'!

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) almost 7 years ago

I am very grateful for your words. So true. 

The experienced agent usually knows what would be the final price. It is up to the seller what strategy they want to choose( under/over market value or just right). Of course, if the inventory is tight and the price is lower than it should be( like most of the short sales), it will bring more buyers, yet, the final price would not be a surprise.

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) almost 7 years ago

I like the idea of pricing it right so it will sell quickly but sometimes sellers think it was priced low if it sells quickly.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) almost 7 years ago

If we give any client an impression that we can do this by controlling the price. . then why do they need us?

By associating power of expertise in one side. .we are also showing that we are not the reason. .price is

 

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) almost 7 years ago
Multiple offers are not always guaranteed, and sometimes the highest offer may not be supported by an appraisal.
Posted by Carol Zingone, Global Realtor in Jax Beach, FL - ABR, CRS, CIPS (Berkshire Hathaway Home Services Florida Network Realty) almost 7 years ago

Price it right and it will sell. Price it too high and it will sit and buyers will start to wonder what's wrong with it. You certainly can't guarantee multiple offers, but based on your local market dynamics, you should have a good feeling about whether it is likely. I've had a lot of multiple offers in the past year and many others that potentially could have been, but some buyers understand the urgency of our market and make decisions quickly to avoid multiple offers.

Posted by Aaron Hofmann, aka Mr. Smyrna Vinings (Atlanta Communities) almost 7 years ago

Your recommendation on just pricing a property well and marketing it well is quite correct. I have on ocassion utilized a method of pricing a property somewhat below market value very successfully. Serious buyers know when a property has been aggressively priced and it's always brought me heavy showings and multiple offers well above the asking price.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Realty) almost 7 years ago

Good piece worth more discussion because whether a property is price below market or above is really just ones perception of market value. With the proliferation of internet related real estate sites the majoirty of buyers and sellers are surfing the net for information, while they are looking at the information differently the one common factor will be the value estimates given by some of the national public sites which can vary greatly and not even reflect reality. This hurts both sellers and buyers and doesnt help Realtors either who will try to explain the problems with these guesstimates of value.

But when its all said and done establishing the correct price range for a home is critical and the most important factor for generating offers. When price to fair market value a home should sell quickly and could garner multiple offers however that results in creating another problem. When sellers get offers quickly they automatically feel it was "priced to low" with many foolishly rejecting these offers, preferring rather to wait for a better deal which may or may not materialize.

We walk a fine line with with our sellers/buyers as it relates to pricing, damned if we do and damned if we dont get it right.

Posted by Peter ReJune, Trusted for Service, Respected for Results (United Realty Group) almost 7 years ago

David, if it looks good and is priced right, it will sell. Various tactics to try and create a bidding war may back fire.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA almost 7 years ago

I have been in bidding wars and they offer the potential for more money but with risk as well. Getting in or out of the transaction is the main focus. Greed has brought many down...MANY...good post

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) almost 7 years ago

Multiple offers are never guaranteed so pricing the home right is key, not trying tio create artificial hype

Posted by Scott Godzyk, One of the Manchester NH's area Leading Agents (Godzyk Real Estate Services) almost 7 years ago

I hate playing games, this is a big investment for both the buyer and the seller. 

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) almost 7 years ago

Agents can play all the games they want but most times a property will sell for what it is worth. Even cash buyers get appraisals.

Posted by Bill Reddington, Destin Florida Real Estate (Re/max By The Sea) almost 7 years ago

There are so many great points here!  Price it properly from the beginning!

Thank you all for commenting.

Posted by David Pylyp (RE/MAX Realty Specialists Inc.,) almost 7 years ago

There's no way to guarantee anything happening with any listed home!  Price it right, market it well, be flexible with showings, and it'll sell - but even that's not a guarantee!

Posted by Kat Palmiotti, The House Kat (406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty) almost 7 years ago
I don't believe anyone can guarantee an offer. We can advise what price range, and condition are most likely to get an offer, but not guarantee one, or multiple.
Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) almost 7 years ago

David - At certain price points in my market multiple offers are almost guaranteed as long as the home is priced right.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) almost 7 years ago
To your first question, I think one can. As to your second question, that is the more difficult task and in most cases, I think cannot be guaranteed.
Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) almost 7 years ago

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