patrick.net

thomas.wong1986 says

It would be no different than what occurs in commercial transactions. Why is it you dont see multiple blind offers in commercial leases.. cause they have a solid open process.

Please describe that process. Do bidders on commercial property openly publish their bids?

I don't want government control of any prices. I just want honest reports of bids, not fraud.

In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual.

I tend to agree with Patrick from a theoretical point. For example, stock auction has a central exchange countertop that people know the bidding price (kinda of) which protects bidders. Derivatives (e.g., CDS) do not have it so they tend to get abused. However, it's hard to build a (honest) central exchange system for housing transaction (unless you bid on street publicly.)

grinderman says

Is blind bidding normal in the Bay Area ?

Yes, though it's not law by any means. Sellers certainly have the right to let bidders know the others' bids. Sellers in a multiple-offer situation, are usually better served by keeping things blind.

gregpfielding says

grinderman says

Is blind bidding normal in the Bay Area ?

Yes, though it's not law by any means. Sellers certainly have the right to let bidders know the others' bids. Sellers in a multiple-offer situation, are usually better served by keeping things blind.

Conversely, the optimal situation for a buyer is to be the sole bidder on an unlisted property.

delete

Sorry Greg , I managed to mess up the quote tags in the above post .

Let's see he has piles cash and has timed every market around the world perfectly. I doubt it.

Only fools rush in? Buyers again ensnared by bidding wars
April 1, 2011

http://www.boston.com/realestate/news/blogs/renow/2011/04/only_fools_rush.html

My favorite is the broker at the open house who told buyers, all eager to see a house - in Burlington, I think - that sorry, he was now only taking "back up offers."

But how do we know those offers are real? Could this just be another broker ginning up the process with a few "phantom buyers?" Does it really have to be this way?

No, says the Real Estate Cafe's Bill Wendel.

Some basic ground rules are needed to rein in such chicanery, bolstered by an online bidding system in which buyers can be assured they are competing against other legitimate buyers, not phantoms, Wendel contends.

To that end, he's renewing his call for an online petition to get state and federal regulators to crack down on these used-car sales tactics and set the stage for a shift to online bidding platforms.

What's at stake here? Wendel blames blind bidding wars for stoking the runaway prices we saw during the bubble years, both here in Greater Boston and beyond.

Blind bidding is incompetable with establishing a true market value (as defined by laws)...certainly isnt fair since it does not promote buyer being "prudent and knowledgable" and promotes influence by "undue stimulus".

REAL ESTATE the definition set forth for U.S. federally regulated lending institutions is used, although other definitions may also be used under some circumstances:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."