patrick.net

m1ckey6 says

azrob00 you are using a classic straw man. If you advertise an asset well below market then yes you are likely to see more interest. What does this have to do with the question asked? If you re-frame the question to suit yourself and you can always claim you are right

What question are you referring to? The original poster?

I think there are some pretty shady agents out there, and then as azrob00 said, there are agents that list for well below market to generate interest. It's an asking price. It's not a selling price. They are taking offers on the house. You make an offer and then they decide which one is going to work for them. If they need to sell quickly and you've got a dozen contingencies that will take time to meet but are offering more money, you're probably not going to win.

A buyer is looking for the best offer that meets their needs as well. Buying a house includes a bunch of different aspects.

It seems that everyone is looking for the cheapest house on the market, and then trying to offer even less. Then bitching when they don't get it, because they hear others are offering less and getting those houses. Those others are most likely offering on houses listed at close to market, not at some massive discount.

It's just part of the buying process, you should evaluate what the house is worth and put a bid on it based on that. That is a fair offer. If they counter with "lots of bids on this house already!", it shouldn't effect you. Your bid is based on the value. If you're trying to buy a house from someone who WANTS it, you're going to over pay, always. People who want something, will pay more than market value for it.

Of course, if I was a seller, I sure would want others to know what the bids were. Nothing creates emotional attachment, like when you think you're going to lose a house, and others are getting into a bidding war over it and you can see what they are valuing the house at. Hiding bids puts the onus on the buyer to evaluate what THEY think it's worth and what others might consider it's worth. When you see what others are offering, you'll re-evaluate and likely offer even more, and a real bidding war will start.

Of course that would just open up a whole new shady business of hammering someones house value down into the ground. Having 8-10 low balling a house, and making it so that anyone with a realistic offer is going to redo their offer to beat the highest low baller.

If you've got legitimate buyers, letting them know what the other is offering is going to really going to help your bottom line. Of course the downside is horrendous. Organized low balling would just decimate the market. I'm betting the downside is far greater than the upside everyone would be hoping for here.

We made an offer on a fixer. It was an REO. Our offer was based purely on what our realtor believed it was worth. We agreed with her market analysis. We then factored in repairs. The banks realtor got back to us (two weeks later) and said there were multiple offers, and we were to submit our "highest and best offer." We liked the house, so we offered a few thousand more. Two more weeks go bye. They countered us with an over the listing price offer. That's when we got angry. We rejected their counter. We moved on and kept looking at other houses. One week later, our realtor calls us and asks if we're still interested in the original house. We said yes. However, we told her to make an offer LOWER than our first original offer. She was silent at first and then burst out in laughter. She said no one had ever done that before! She submitted the offer and it was accepted by the bank. The house is now ours and we couldn't be happier!

Azrobb 00 wrote: "As for rentals, same thing. The last time I advertised my one remaining rental on craigslist, I had three parties show up to rent it at the same time, and they bid it up by $50 a month, even in this poor rental market."

I am a landlord and I just rented one of my houses out on the 1st. The management company had several tenants show up and on a particular day I just happened to be there going through applications that they approved (FICO, jobs, no evictions, etc.) As I was going through these applications, there were 3 couples that came into the office at the same time. I would never even think of bidding up the price like you did. I believe that is unjust, unfair and unethical. You are a vulture and I wouldn't be able to sleep at night if I did something like that. I have immaculate homes and I get great tenants. The management company and I treat my tenants with respect, not people to be preyed upon with bidding wars for a property that is worth X amount per month. I have never had an eviction and only 2 late payers in 17 years of being a landlord. My advice to anyone renting would be to run as fast as you can if the landlord is putting the squeeze on you to bid up the price of a rental property.

tatapu70,

azrob00 was setting up a strawman argument by citing a case where he would get bona fide multiple offers by listing the house at a low teaser price exactly for the purpose of instigating a bidding war.

Does this contrived counterexample prove anything about the prevalence of multiple offers for listings that are just "competitive" with other listings, rather than teaser listing? No, it does not, and that's why m1ckey correctly called it a strawman argument.

justme says

azrob00 was setting up a strawman argument by citing a case where he would get bona fide multiple offers by listing the house at a low teaser price exactly for the purpose of instigating a bidding war.
Does this contrived counterexample prove anything about the prevalence of multiple offers for listings that are just “competitive” with other listings, rather than teaser listing? No, it does not, and that’s why m1ckey correctly called it a strawman argument.

I agree that there are unscrupulous real estate agents. No doubt about it. But, I disagree about the strawman.

Think of it this way. Would you be more likely to bid on a property that is priced below market value or above market value? Below market value, of course. And so would everyone else. So, it makes sense that those properties get the most action and visibility. I don't find the counterexample contrived at all. Do we know that there is a prevalence of multiple offers for listings that are just "competitive" with other listings? Or are they mostly on below market value properties? Note-I'm not saying everyone listed below market value on purpose. Maybe they underestimated the value, maybe they had a poor realtor, who knows?

In any event, who cares. Like many others have said--it's easy to win that game. Don't raise your offer.

I posted a modest proposal similar to Vain's, on a different forum.

AB 1721 (Koretz-D) Prices: overcharges
Prohibits any person, at the time of sale of a commodity, from charging, as defined, an amount greater than the price, or computing an amount greater than a true extension of the price per unit, that is then advertised, posted, marked, displayed, or quoted for that commodity.

http://www.sen.ca.gov/sfa/2003/_03_DL03.HTM

Why shouldn't this law be applied to houses, and compel the seller to sell at their listed price, exactly?

After all, if you go to a grocery store, and a carton of milk is priced $1.99, the checkout clerk will take your $1.99 for it - instead of saying that there are multiple offers for this carton, and to put down your highest and best.

If real estate cannot be sold at higher than posted price, it would force all listings to have realistic pricing and prevent bidding wars.

tatupu70 says

Would you be more likely to bid on a property that is priced below market value or above market value? Below market value, of course. And so would everyone else.

I disagree - I bid what I value the house at. Listing price don't mean diddly to me. Now, the other side of the coin is, REwhores refuse to submit an offer (on REO's especially) that THEY fell is below what THEY feel is "market value". SO it is REwhores that have an issue. "Market Value" will only be known when the buying programs are removed.

alex says

If real estate cannot be sold at higher than posted price, it would force all listings to have realistic pricing and prevent bidding wars.

So, you need a law to prevent you from bidding too much?

Bap33 says

“Market Value” will only be known when the buying programs are removed.

I disagree. There is a different market value with the incentives, but there IS a market value...

alex: housing isn't a commodity. You might want to dig out an economics textbook, housing is an asset class.

I don't like the low teaser listing prices, and I especially don't like really low prices that aren't market as auction or bid on the mls, because they give unrealistic ideas as to market price. Mark as auction or bid, and then who cares, you've disclosed your intentions. Then again, you have unrealistically priced short sales, which the bank will later come back with a higher price on. So it is what it is, hardly worth crying like a small child about.

All of this "they should have to sell at list price, it's so unfair that somebody outbid me"waah waah waah, won't some cries to go with your whaaaamburger? Or you could just try growing up, offering what you are willing to pay, and walking away if that doesn't win; If they don't truly have other offers, they will take yours as it is.

Regardless of how the laws are written, housing prices will be able to fluctuate and people will find ways of offering more than the asking price by having little add on items to their offers. They will get creative.

People will always try and get a little more for their house, it's special in some way to them. Or they think they can get extra because someone else thinks it's special. Whatever, the reasons, they will try and get the most for their house possible.

That being said, as a buyer, it's simple. Do your own research. It's your largest purchase you will ever make, *DO* research. Find out what it's value is. Offer that value, or less if you think you can get it.