Have any of you sold a house through a bidding war?
Asked by
crazyguy (
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)
January 18th, 2021
Basically real estate is sold in one of two ways:
1. Conventional: This is where the seller sets an asking price, and entertains offers that are generally below the asking price. This method is used in Southern California for essentially all real estate.
2. Bidding War: This is where the seller lists at a price about 20% below market price. Bidders then submit their bids, all of which are generally above the listed price. All bids are opened at a pre-determined time, and the seller accepts one of the offers, or submits a counter-offer on one or more bids. This method is used for essentially all real estate sold in the San Francisco Bay Area.
Most of us are very familiar with the conventional method. My question is have any of you ever used the somewhat newer method of a bidding war?
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10 Answers
Twice in the last 6 months.
But in both cases the bid competition was spontaneous and driven by motivated buyers set on getting the same house. The listings were based on full fair market value with no formal plan for a bid process.
I don’t work in Cali, and our local market (northwest Oregon) isn’t structured the way it is in LA or SF. Right now a majority of sales are done in the way I explained. But things could change.
@JLoon Thanks for your answer.
Once in Northern California. But as @JLoon describes in her above post, it was spontaneous and driven by motivated buyers.
No, but it is happening in the Nashville market where my husband and I have been looking and I hate it. They are not marketing 20% below, but more like 5% or at market value, because prices are rising very quickly and houses sell within a few days.
If that is common in your market you certainly can try it. Put a deadline for offers and see what comes in.
@crazyguy – What’s interesting is that at least in my area, the rental market is drawing as much or more interest as home sales.
@JLeslie Sounds like a buying boom in Nashville, which has been predicted for some time. I would recommend jumping in early in the boom cycle, so you can benefit from it.
Our daughter has bought three homes in Oakland in the last 10 years. Each was purchased at what we thought were insane prices. The first two worked out fine, the jury is still out on the third one.
@JLoon Before deciding to sell, we looked for a tenant. After 3–4 weeks of basically no interest, we have decided to sell.
@lastexit The way I understand the market in Northern California, you have to do it that way, now.
My sister and her husband sold their place in San Jose last spring, at the height of the COVID scare. They had owned the place for 26 years.
The had three offers the night before the listing went live on the MLS service. I don’t know if it was a bidding ‘war’ per se, but several skirmishes. It sold about $25K higher than they listed it for.
They took the second highest offer because it wasn’t contingent on the buyer selling something else. It was a straight out purchase. Cost them about $5000 to do that, but it closed really quickly.
Well houses here get auctioned off all the time.
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