There is perhaps nothing more polarizing in real estate than a good old fashioned bidding war! While music to the ears of a seller, multiple offer scenarios are a nail biting roller coaster ride for a buyer. Bidding wars are economics at work in my eyes. Let the market bare what it’ll bare! I want to confirm and debunk some of the myths associated with these enthusiastic situations from a listing agent’s perspective.
1. Bidding wars are always good for the seller – FALSE – I’ve had multiple offer situations, albeit not many, that end with the buyers simply walking away, refusing to bid a price up. Now, we were able to go back and put a deal together in those scenarios, but the shock of everyone walking away was memorable! So, I wouldn’t say it’s always good, but generally it is!
2. Buyers can bid whatever they want because the appraisal contingency will protect them – TRUE – As long as an appraisal contingency is in place, a buyer will have a third party opinion of value to protect their investment. I’m not saying the appraiser is always right! That’s another blog topic for another day! The seller does not have to accept the appraised value if it comes in low. In this situation, a seller lets the buyer out of the contract and looks for another deal.
3. Sellers can leverage their bidding war to eliminate repairs – TRUE & FALSE – In a very competitive situation a Seller can negotiate an as-is sale with no repairs to be made. However, most buyers are not going to be comfortable with an as-is sale so they’ll actually leverage their situation by paying top dollar to get the Seller to do more in repairs. I prepare every seller that if they get what they want or more than they want that they will probably face high expectations from a buyer on repairs.
4. Bidding wars are a product of pricing too low – FALSE – I tell every buyer that the best time to buy a great piece of property is always. If it’s a great piece of property, there’s significant value and desirability that just gives you a leg up when time to sell. The best home in the best area in the best condition at the most competitive price is always going to have a bidding war, no matter the market. I call this “getting all the chickens in the pin at the same time.”
While bidding wars are a lot of fun for Sellers, there is a strategy to ensure you maximize your opportunity. The challenge is always condition/staging and price. There’s not much you can do about the location of a piece of property, but you can control how it’s presented to the market.
This is where we come into the equation.
I’ve spent years perfecting the art of navigating the multiple offer situation. Over 40% of the nearly 70 listings we sold last year went into multiple offers. We take great pride in the fact that we helped sellers receive over 98% of their original list price at the end of their transaction on average. But it’s not all about price. Multiple offer scenarios helped our Sellers get valuable terms that they desired such as closing dates, move out dates and lease back options, shorter contingencies or no contingencies, more earnest money, or not having to throw in valuable personal property. This is a great example of why our team was awarded the top Keller Williams Realty residential real estate team in the entire state of Georgia for 2015.
To put our expertise to work for you and those you know, call us at 404-419-3619 today.
Written by Andy Peters