Key Highlights
- According to Redfin,6% of all single-family home offers in August resulted in bidding wars
- Agents advising clients to be extra aggressive to win
- Agents need to prime their clients with extra data about their targeted markets
It’s a tough world out there for agents and their potential buyers. With historically low interest rates, scant inventory and through-the-roof demand, agents and their clients MUST be on their toes in order to “win” their bids.
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According to Redfin, bidding wars came into play 56% of the time for offers on single-family homes, 54.7% of the time for offers on townhomes and 41.3% on condominiums. Overall, 54.5% of offers on all types of housing were involved with bidding wars.
To be successful in those bidding wars, agents and their clients must be time sensitive. When a property becomes available that meets the buyer’s criteria, check out that property (in person, if possible) immediately. (Immediately translates into “the sooner the better” and no more than 24 hours.)
According to Susan Hamblen, broker and owner of EXIT Realty Achieve in Long Island, homes that are priced correctly are generating offers within the first 24 hours that the home is listed. On top of that, Hamblen said, “Homes are going $40,000 to $60,000 over ask, easily…” within her market that has only two months of inventory.
Eugene Cordano, vice president and director of sales with Halstead in New Jersey, is seeing bidding wars generating some 15%-20% above asking across all price points. On top of offers in bidding wars that well exceed list prices, Cordano added, “Sometimes (winning offers) something that’s very emotionally driven, or driven to the point where the buyer really wants it and is just willing to pay and will offer, either in price or in terms, something that will win the day versus all the other buyers that were there.” That “something that will win” could be waiving all contingencies and/or personal letters to the sellers from the buyers that render them worthy buyers of the seller’s home.
In markets with the hottest zip codes, such as Colorado Springs or Dallas suburbs such as Frisco and Plano, large, updated homes with large yards, three-car garages in the right neighborhood and right school district that are marketed well often generate offers $10,000 – $20,000 over list price.
Even in markets such as Birmingham AL, less hot than Dallas suburbs or Colorado Springs, Peck Barham, an agent with TeamBarham, Keller Williams Homewood, “We haven’t seen (bidding) quite like this. I think in August something like 500 homes went under contract in a three-week period, which for Birmingham is a lot. That’s a lot of homes going real fast.”
Thanks to HousingWire.
Also read: How Some Homebuilders Coping with Impacts of Coronavirus, You Have 7 Seconds to Maximize/Sell Your Listing, Developers Rethinking the Future of Homes
