In any arena where valuable assets are exchanged - like art, antiques, or vintage cars - auctions are a common way to determine their worth.
Buyers publicly compete against each other, driving up the price until an ultimate winner prevails.
But in the world of real estate, these auctions take on a different form - we call them “Bidding Wars.”
However, there's a crucial difference between traditional auctions and real estate bidding wars. While auctioneers openly reveal the bids in traditional auctions, in real estate, the listing agent intentionally obscures what other buyers are willing to pay.
Listing agent: “Thank you all for your offers. Your counter is… giving us more money! Deadline Saturday by noon. I won't tell you how high, by the way. Just pull a price out of thin air and pray! Also, don't call me. I for sure won't pick up.”
It's like a high-stakes game where buyers are left in the dark, stumbling through blind offers, and sellers nervously await the outcome, hoping they're not leaving money on the table.
In the past few weeks, we've navigated some bidding war battles. Lets look at 3 examples and there outcome:
1. the charming Dilworth listing: Multiple eager buyers drove the price well beyond expectations. In the absence of transparency, 5 buyers' bids fell short, unaware that just a fraction more could have secured their dream home. Meanwhile, the seller, shielded from the full scope of offers, was left with a nagging doubt – could they have fetched a higher price?
2. Beverly Woods gem: Nestled in the heart of South Park a flurry of offers left buyers hesitant to even offer. Without insight into competing bids, some made conservative offers, all unaware that others were willing to pay more. The result? A missed opportunity for both buyers and sellers.
3. SouthPark Family home: In stark contrast to the secrecy of traditional bidding wars, clear communication and negotiation were the pillars of this transaction. Our buyers left thrilled with a deal that accommodated their needs, while the sellers were ecstatic to have found a buyer who valued their home's history and equity. It was a win-win scenario, leaving both parties excited for the next chapter in their lives.
These scenarios underscore the critical need for transparency in bidding wars. When buyers and sellers operate in the dark, everyone loses. Buyers miss out on their dream homes, and sellers risk undervaluing their prized properties.
Sure, Listing agent, you may miss out on a rare chance that a googly-eyed home buyer will profoundly overshoot the mark, but the greater risk (which we see way more with tight-lipped listing agents) is the risk of leaving money on the table.
So like all luxury goods, homes should be sold with transparency in competition. Call each agent who has submitted, answer all questions, and help buyer’s agents to guide their clients to winning numbers. A tried and true strategy, we wish would be broadly adopted (it is by the best agents in the game).
