How Sellers Can Create a Bidding War On Their Property
I had a house listed on the MLS priced at $600,000 that was not selling. The sellers had vacated the property, and we had lots of traffic through, but nobody was making an offer. My client and I sat down and looked at what had happened. A couple of homes had sold around us that settled, which showed us that the market actually was around $570,000 for the property. I said, "Look, we can wait till spring." Often, we'll pull houses off the market and wait till February to put them back up because there's such demand at that time. But my client said, "Look, I might save four or five months worth of mortgage here, and it'll be offset by the time. I'd rather have this process done." I said, "Fine."
So we made the adjustment to $575,000. The property got a buyer to come through, who decided to make an offer for $560,000, two days after we made the adjustment. I talked with my client, and they said, "Absolutely not. We'll accept the $575,000 if they want to do that." But the buyer wasn't willing to do that. I said, "Look, we've just made this adjustment. I think this is where the market is. Let's wait." Another buyer came in, made an offer of $550,000 and my client gulped. I said, "No, don't worry." But my client decided they would come a little bit off of $575,000 at that point.
I told the other agent at $550,000, "Let's not waste our time here." She was poo-pooing the price, and poo-pooing the value, and poo-pooing everything and whining, "The house needs all this and that." And I said, "Look, you can tell me anything you want to about what your client needs to do to this house, but that has zero to do with the value of the home in the marketplace. It has something to do with your buyers' value, of course. You make an offer based on what she feels like she can afford to buy the property. That's fine. But we're not going to take anything less." I rejected the negotiation on behalf of my client. I took the opportunity away from the other agent in essence by saying, "Forget it, please." And she came back a couple of days later again at $550,000.00. And I said, "Please, no…we're just not close."
She went back to her buyer and a couple of days later came up to $560,000. My client said, "Well, we had $560,000.00, we let it go." These people had moved a lot. "Maybe we should consider that." And I said, "Well, okay, but I would suggest that we just not ratify something right now. Let's just sit and wait. We don't have the pressure to have to accept this offer at $560,000. You've just lowered to $575,000 five days ago...that's a lot of money to give away. "
Well, another buyer came in the next day, and that buyer also was very interested at $560,000. But I was able to use the two offers in competition to drive the price higher, ultimately to $570,000. This was a price that my client had already said to me they would be willing to consider because they had seen the house down the street sell for $570,000. Due to the time of year, they also knew that the market was fracturing a bit.
Meanwhile, the other buyer who'd missed their opportunity kept calling and said, "Look, if it falls through, we'll pay $570,000." And that's the way it goes. Somebody's going to get their name on the mailbox. And the first buyer – if they had just paid the $570,000.00, would have gotten it, right?
Sellers should adjust their price to where the market is, and the house will sell and even after weeks on the market sometimes in a multiple contract scenario. See part one and part two of our article series on timing market. Only one buyer will put their name on the mailbox. When pricing your house right, multiple buyers will fight for that right, thus creating a bidding war.
About Eric Stewart
Eric Stewart started his real estate career in 1987 and each year he and his group sell over 150 homes in DC, Maryland, and Virginia. The Eric Stewart Group has completed more than 3,000 real estate transactions, placing Eric in the top 1% of Realtors® in the nation. With a comprehensive approach to marketing and a knack for negotiation, the Eric Stewart Group has built a reputation of trust and tireless persistence throughout the area.