Bidding Wars on Listings: Make Your Phone Blow Up
Bidding wars is a phenomenon in real estate right now. As buyer demand rises and inventories shrink, sellers are reacting by trying to underprice their home just enough to spark a bidding war. In some of the markets, this technique is ‘paying’ off.
Douglas Rill, a broker with Century 21 America’s Choice in West Palm Beach, Fla., told the Sun Sentinel that a lender informed him to underprice a foreclosed home for $37,600. While the home had a leaky roof, among other problems, comparable sales in the neighborhood would have shown the home valued more at $50,000, Rill says.
Not all situations are like this though, and real estate agents are cautioning sellers to lessen the risk by pricing their home at the lower end of market value, but not to undersell themselves. This will prompt more buyer attention without ending in a loss.
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Source: “Multiple Offers Possible in Tight Housing Market, Experts Say,” Sun Sentinel (Aug. 23, 2012)