Tuesday, 21 August 2018
Agent Resource Center
This Old House - Do-it-Yourself

Boston Real Estate Bidding Wars - Tips and Tricks

Written by Posted On Friday, 19 January 2018 00:23
Boston real estate bidding wars Boston real estate bidding wars

Bidding Wars in Boston MA

  1.  

    You’ve been looking at Zillow for Boston homes for months and made a part time job out of touring homes multiple Boston neighborhoods. Then, you find it. It's a modest but charming Back Bay brownstone that’s right in your price range with the just the right size and in the perfect location. Your excitement begins to build and then, you see the dreaded line at the bottom of the listing: “No showings until the Open House on Saturday. All offers due on Monday by 5 pm.”

  2.  

     Looking for Boston Homes

  3. If you’ve been in the market for a new home in Greater Boston or any of the surrounding suburbs such as Cohasset, Hingham or Quincy in the last few years, you already know how this story is going to end: cars down the block and at the very least a hundred people are going to show up at the open house.    A dozen or more offers are going to be submitted to the listing agent. With many of them above the asking price or offers to pay in cash. And so begins the bidding war for your perfect home. There are many reasons that Boston real estate prices have been driven up, but thats for a differnt day.
    The real estate market in Greater Boston, Massachusetts seems to have come full circle once. Bidding wars are back and buyers and sellers have a lot of questions about how to negotiate when a bidding war comes into play on a home they are hoping to buy.
     

    What Are The Legalities of a Bidding War?

 
A bidding war comes into play in a real estate negotiation when several potential buyers submit competing offers for the same listing at the same time. There really are no hard and fast rules when it comes to a bidding war. Although a popular belief, a private seller in Massachusetts does not have a legally obligation to accept the highest offer made in the case of a bidding war. A seller has full prerogative when it comes to deciding which offer to accept.
A seller has the right to forgo the highest offer and accept a lower offer for any number of reasons. One such example would be the financial strength of the buyer (i.e., a cash buyer), or perhaps the buyer is willing to waive inspections, or maybe it's because the buyer wrote the seller a heart warming letter telling them how much they love their home! Bottom line - it's up to the seller to decide and up to the buyer to impress the seller with whatever tools he can pull out of his bag of tricks.
 

Negotiating for a Home

 
From a legal standpoint, an offer to buy a property is simply an invitation to negotiate. It provides a buyer with absolutely no legal rights to the property and the seller is not obligated in any way to accept the offer. An offer does not and is not a legally enforceable contract until it is accepted and signed by the seller. A real estate agent involved in a bidding war has an ethical and fiduciary duty to get the highest and best offer for their sellers and, there is nothing that is illegal about a seller or an agent creating a bidding war to get the best price for the property.
A good listing agent is doing their job for a client by creating a seller's market for their property and pitting buyers against each other to drive up the price. A real estate agent is ethically bound and must be honest when they are communicating with prospective buyers. They cannot make any material misrepresentations and cannot lie about an offering price. Agents must show all offers submitted by potential buyers to their clients, however, the ultimate decision to accept an offer is made by the seller.
 

Bidding Wars in Boston MA

 
There are a number of different ways that an agent might manage a bidding war. Some agents want a set date for all preliminary bids to be in. In a case where there are only two bidders, an agent might be instructed by the seller to ask if they would like to rebid. This process can continue until one of the bidders decides to back down. When there are more than two bidders, a common practice is to start a second round of bidding setting the minimum price at the highest bid in the first round. Like an auction, bidding wars can move very fast and buyers involved need to be ready to react quickly and why making your offer stand out in a bidding war is so important.
 
           Make Your Offer Stand Out In a bidding war, buyers want to know how they can maximize their chances in being the offer that the seller accepts? Here are a few words of advice:
  • Make a STRONG offer. You know that you are in a bidding war and that there are other offers on the property, so make sure you think through your offer and make it as financially strong as possible. If the house is worth asking price, then offer asking price. This is not the time to offer 90 percent of the asking price unless that is what the house is really worth. You want to make a strong offer so you can stand out.
  • Get preapproved and have your paperwork ready. Sign everything related to the offer, write a check and give it to your agent. Don’t leave any loose ends.
  • Write a letter to the seller. Tell them about yourself and your family and why you love the house. Yes, this is a business transaction, but buying a house and even selling a house can be one of the most personal business transactions in which you will be involved. Your real estate agent will be able to help you craft a letter.

 

How Can You as a Seller Take Advantage of a Bidding War For sellers who find themselves in a bidding war, it's all about price. Say you have a house that valued out at about $620,000. You could easily go to market at $629,900 or $639,900 and have a good number of showings that on in an average market will eventually land you an offer of around $610,000 or so in about 90 days or so. However, in a bidding war you might instead go to market at say $599,900. This puts your home at an price point that will attract buyers and in a bidding war, their goal is to offer you the best price possible to win.
Basic strategy is to market your property at a price that is so attractive you will be sure to attract buyers and you will most likely get a good offer, maybe even several!
Rate this item
(1 Vote)
Dean Cacioppo

Dean has worked as a real estate agent, real estate instructor and has years of experience working on the technology side for major Real Estate Brokers, Agents and MLS’s.  Dean has sat on the Board of Directors for multiple MLS’s including being elected to President.  Years of serving on a number of MLS Committees for multiple boards, served on the Strategic Planning Committee for Louisiana REALTORS and participated in many task forces and committees for the benefit of all Real Estate Agents in Louisiana.  Dean has provided live training on technology, direct IT and Technological Support to thousands of Real Estate Agents for over ten years.  With years of being the go-to guy on technology strategy, training and support for Brokers and MLS’s, you can now have direct access to Dean for your personal technology needs.  Real Estate is extremely competitive on the web and we specialize in Real Estate Websites, SEO for Real Estate and Social Media Marketing for Real Estate.  Please don’t be confused, we are happy to work in all business verticals and have quite a bit of experience in a variety of markets.

deanknows.com

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.