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FortWayne
2011 Jul 31, 1:29am
Bidding wars work best when there is only one bidder and he doesn't know.
I really dislike this system of theft. Even if there are multiple bidders, they get played against each other in a very crony kind of way. Not all offers make it to the seller either, usually only those that make the most benefit to the real estate middle men.
investor90
2011 Jul 31, 2:27pm
robertoaribas- YES! and they should be indicted, arrested, and left to the vultures in the middle of death Valley with NO WATER...NO FOOD....and maybe a lockbox on a local rattle snake! Banish the lying slime! They have tried this same LIE game on me...and it didn't work. I called the seller directly and told them I was "withdrawing my offer of $75k above asking, because I just "lost" my job" That set it off...WHAT OFFER? I haven't had an offer in months ....that lying thieving #$%$#@ or Real- A - SOB....! can go to...! YES ! take the clowns DOWN!
This bidding war concept really perplexes me. I can totally understand it in a market that is appreciating, but I can't understand it in a depreciating market.
I mean, in this economy, every day/week the property values are depreciating not appreciating. The price submitted today does not represent what it will be tomorrow.
If the house is listed at 200k today. The silent bids take place for the highest number. Hell, you may be the highest silent bid of 210k and then tomorrow, or next week the value will have come down 10k to 50k, or more.
Now, you're upside down. Just doesn't make sense. To me, the first bid within reach should simply be accepted. Thank got these guys are not selling milk to the public based on silent bids.
bmwman91
2011 Jul 31, 4:25pm
I think it is denial. A lot of people are still thinking with real estate agent catch-phrases. Buy now pr be priced out forever, because RE only goes up. Buy now & sell for profit next year!
My sister sold her house. The buyer was unethical.
They put in a bid. but then had her friend come along using a different realtor and submit a lower bid on the house.
The realtors tried to get both parties into a bidding war, but since they were in cahoots with each other, no one took the bait.
The realtor told my sister that since both parties came in around the same price, this was the 'true' value of the house and she should take the higher offer.
My sister realized she was scammed after the contracts were signed and both parties showed up together for a walk-through. She recognized the 'friend' of the buyer as the party who walked through the house earlier and made the lower offer.
SO, I guess if you want to be sleazy, there are lots of ways you can make a bidding war work in your favor.
zzyzzx
2011 Jul 31, 11:50pm
Tripper2248 says
How do bidding wars work?
Realtors lie about them. If we were to believe all these bidding wars existed, then prices would not have nose dived as it has by deep double digit percentages year over year. There would still be plenty of demand out there for years and decades
I agree with the above comment.
bubblesitter
2011 Jul 31, 11:55pm
Also, bidding wars can result in offers (prices) that won't appraise.
Who cares when one has all cash?
Have fun reading...
Can I get proof of a competing offer? The answer may surprise you
http://www.phoenixrealestateguy.com/can-i-get-proof-of-a-competing-offer/
A couple of months ago we had a client that submitted an offer on a home that had been listed for 73 days. A couple of hours after the offer was sent in, the listing agent called and said something to the effect of, “Just wanted you to know that we got another offer in today, so the seller is requesting that you submit your ‘highest and best’ offer. I pointed out that it was a remarkable coincidence that two offers came in that morning on a listing that had been on the market for 73 days. After consulting with our client, we informed the listing agent that the offer submitted WAS the ‘highest and best’. In yet another remarkable coincidence, our clients offer was accepted the next day.
I can understand the point of view that verifying another offer could compromise confidentiality, but what about verifying your own offer? Is there no way to request a receipt of the seller having received your offer? There are a lot of stories out there of agents not submitting the highest offers for various reasons (robertoaribas' story, for example). Allowing bidders to request some type of offer delivery receipt, accepted or not, would help solve this problem.
Also, bidding wars can result in offers (prices) that won't appraise.
Who cares when one has all cash?
Who pays more than they should. Cash buyers who pay more than market amount aren't very smart.
bubblesitter
2011 Aug 1, 3:46am
Also, bidding wars can result in offers (prices) that won't appraise.
Who cares when one has all cash?
Who pays more than they should. Cash buyers who pay more than market amount aren't very smart.
Oh, I was referring to appraisal part. Appraisal only matters when home purchase has to be financed.
Oh, I was referring to appraisal part. Appraisal only matters when home purchase has to be financed.
It matters for both.
On a $100K house, why would a cash buyer pay $150K for a house that will only appraise for $50K?
Why should they pay $65K or even $55K. Or even $51K?
Are you suggesting cash buyers should bid whatever with no regards on actual value?
A couple of months ago we had a client that submitted an offer on a home that had been listed for 73 days. A couple of hours after the offer was sent in, the listing agent called and said something to the effect of, “Just wanted you to know that we got another offer in today, so the seller is requesting that you submit your ‘highest and best’ offer. I pointed out that it was a remarkable coincidence that two offers came in that morning on a listing that had been on the market for 73 days. After consulting with our client, we informed the listing agent that the offer submitted WAS the ‘highest and best’. In yet another remarkable coincidence, our clients offer was accepted the next day.
If I came across that, I'd say, "actually now our 'highest and best' is $10K lower than what I said the other day." :)
It's one thing when you get a bidding war within the first two weeks. Coincidentally having two offers in one day after 73 days, assuming no changes such as price cuts, is a little bizarre as that agent said.
he was on edge of signing another (lower) offer that the listing agent had, which would have resulted in a double commission for the listing agent. Instead, the lister lost the deal, and got hauled before the commissioner, and suspended.
Nice, good work there. It's nice to hear that the commission is that responsive. I have not necessarily heard the same thing in other locations.
My sister realized she was scammed after the contracts were signed and both parties showed up together for a walk-through. She recognized the 'friend' of the buyer as the party who walked through the house earlier and made the lower offer.
Never heard this one before. Were both bids backed up by sufficient paperwork, e.g. ability to pay and other things? It seems like a decent amount of work to scam someone. What do you think your sister lost in $$$ by accepting the offer?
bubblesitter
2011 Aug 1, 5:06am
Are you suggesting cash buyers should bid whatever with no regards on actual value?
No. The point is all cash purchaser can be stupid enough to pay as much he/she wants to or walk away if he/she thinks if it is overpriced. How does an appraisal matter in that case?
Are you suggesting cash buyers should bid whatever with no regards on actual value?
Who pays more than they should. Cash buyers who pay more than market amount aren't very smart.
Yes this has happened, when some back in 1998-99 hit the jack pot cashing out stock options when their recent IPO stock price hit $300-600/share. Spending $500K 'of some one elses money' on 400K home was the norm. After all its free money...p>
Turns out this was a short-sale...it was on the path to foreclosure. I was told with a 1/2 hour that my offer was too low, that were 3 offers on the place already, well above my highest price: I walked - I'm keeping my eye on what it actually sells for so I can try to determine what the others would go for. Since this is a neighborhood that is ideal (for me), I don't mind seeing these empty homes being bought.
A decision was supposed to have been made yesterday, but it is still listed and the "Open House" sign still outside?
Tripper, I think there were no other offers, but your offer is too low for them to accept. So they put sale signs up again hoping they can find a sucker who's willing to pay the asking price. If they found the sucker, it's done. If not, they may contact you soon.
ArtimusMaxtor
2011 Aug 1, 7:37pm
Oh your not wrong in your thinking. See thats the downside of this thing. When you buy deep discount. Short Sale whatever. Your looking for a place to live. All these great deals. Hey, if your buying to get equity. This isn't the game to be in. Neighborhood prices falling fast. Means when you buy into that "Great deal". Everything else is falling in all around your great deal.
There is no such thing as neighborhood stability anywhere in the U.S.A. Maybe one or two pockets. Otherwise, everything is subject to this housing "Mud Slide".
I can tell by the way your talking. Your, way to focused in on one house or deal. That spells noob. Your a nice person. Its smart to approach a board like this and ask in the way you are.
What you really focus in on is after you have the house and have to get rid of it. Your a happy buyer. So watch out someone could be looking to put the hook in you.
When I say smart your making genuine inquiry. Trying to learn. I can understand that. Everyone starts somewhere. We all did.
the median price for Phoenix hasn't moved more than +/- $1000 in over half a year. Meanwhile inventory has dropped by over 30%...
We had over 8000 sales last month, and have 25000 active on the mls.
Homes scheduled for foreclosure are now at 30,000 down from 50000 just over a year ago.
Maybe there will be some return to falling prices, but I can't find a single data point to show it, especially on homes under $150K.
What a troll pushing your wares on Pat.net and patting your own back every chance you get. Your cartel masters must be very proud the way you are always getting that Phoenix market front and center on web sites. I wouldn't be surprised if the local Phoenix real estate board has an award there acknowledging your help in pushing sales in Phoenix. Keep up the good work!
I took over three years of abuse from housing bulls on zillow every time I posted anything negative, and got death threats over the phone for some of my writing.
So, if you want to post something contradictory to one of my posts, try using a FACT. You'll notice them all through my posts.
I only see a history going back to 2010 -- did you use a different username then?
How about this...
Submit an offer on a property, as best as you see fit depending on what you want to pay and consider that the property is worth it.
You should ignore any Agent comments on "multiple/competing offers", it does not matter and there is no reason to consider it. You should be making your decision on what you value the property to be, and NOT what others value it at.
to sum up, if you have to have it, you will overpay. if you can wait for the next auction and the next, you will get a better price. the key is to have the mindset and belief there will be a better opportunity if you don't win the current auction.
Well said.
This bidding war concept really perplexes me. I can totally understand it in a market that is appreciating, but I can't understand it in a depreciating market.
I mean, in this economy, every day/week the property values are depreciating not appreciating. The price submitted today does not represent what it will be tomorrow.
If the house is listed at 200k today. The silent bids take place for the highest number. Hell, you may be the highest silent bid of 210k and then tomorrow, or next week the value will have come down 10k to 50k, or more.
Now, you're upside down. Just doesn't make sense. To me, the first bid within reach should simply be accepted. Thank got these guys are not selling milk to the public based on silent bids.
It makes sense because not everyone is investing in real estate - or willing to live in an apt for 10 years waiting for prices to fall. They are buying a place to live, so all houses are not commodities (unless you are buying a tract home and even then there are differences). Milk is a commodity, the next carton is the same as the first. And in many areas and price ranges, there may be plenty of houses for sale and declining prices overall, but there are only so many DESIRABLE houses for sale at any given moment.
If you're the only offer, you can probably put in a lower offer and negotiate.
If you know there are multiple offers, then you are going to have to go up to your best and final, whatever that is, either from the get go or when countered. Note I didn't say you had to go over, but if it's multiple offers and you are still trying to get a steal, it's probably not going to work, although it still does every once in a while when the other offers turn out to have issues or be even lowerball offers.
While a house that's on the market for 73 days having multiple offers is suspicious, a house that shows well, is priced low or fairly, in a desirable area, and goes pending within a week of listing my well have multiples - not too surprising.
I've had my eye on a development of townhomes in a good neighborhood. Most of the land that had been set aside for this development never sold, 60% of the homes that were built are in foreclosure, with 1 having been sold just recently. There is one (non-foreclosure) home that just came on the market and listed at 80K below the foreclosure home (same specs) that recently sold with the caveat that it would be sold to the highest bidder. I'm wondering how this will work out? There are several homes that are in foreclosure that may be affected by the price this one goes for - and I really don't want to get into a difficult bidding war. I have a sizeable down payment saved up and a set amount that I can comfortably borrow without enslaving myself to a mortgage. I will be bidding fairly close to the asking price and not going much beyond it. I don't think I will win the bidding, but I have this expectation that whatever this home sells for, that will be what sets the price of the others as well. As we get into the slower season, I think that if I am outbid on this home, I will still be able to get one of the others for something near the price this one sells for. Am I wrong in this thinking?
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