The term “bidding war” often comes up when it comes to buying or selling a home. Sellers love them; buyers usually don’t want to be part of one; and realtors field all sorts of questions about them.
Is a bidding war the best thing for the sale of your home? What even is a bidding war? Here’s what you need to know about real estate’s mythical beast.
What’s in a name?
A bidding war can occur when several interested parties make offers on your home. Most often, and especially to incite a bidding war, offers are all taken on a specific day at a specific time.
Sort of like a silent auction, all of the offers are written down in secret, and the selling agent will compile them all in an envelope. At the offers deadline, the sellers will review all of the offers and pick the best one.
Because of their nature, bidding wars can often drive the price of a home well over its value and/or asking price.
While it’s true that the highest offer usually wins, certain conditions (home inspections, financing, etc.) may make lower offers more attractive. In those cases, sellers may want to counter offer to try and get a better price with more favourable conditions.
Why do bidding wars start?
Not every home will see a bidding war during its sale — in fact, quite a low percentage of home sales actually do. While it’s true that not every home deserves a bidding war, there are several mitigating factors that can enhance its chances.
- Location: Great neighbourhoods, proximity to popular amenities (shopping, recreation, good schools), quiet streets
- The property itself: Updated cosmetic features, large lot, desirable fixtures (pool, gorgeous kitchen, luxury bathroom fixtures, etc.)
- Competitive price: A house in great shape, in a great location, priced around market value, is almost certain to generate a bidding war under the right conditions
How can I start a bidding war on my home?
If your home is in wonderful shape and a great location, you’re already part of the way there! If not, there are still ways to generate a bidding war on your home.
First, clean it! It’s amazing what a spotless home can do to charm prospective buyers. Second, upgrade where you can. If your home hasn’t hit the market yet, make those small upgrades you’ve been putting off. Update cabinet hardware, put up that towel rack, and redo those hardwoods if possible.
The major factor to consider is market conditions. If you’re in high season (April-June) and buyers are out in full force, your chances of inciting a bidding war are much higher. You can price your home competitively based on sales in your area, and you can increase foot traffic with open houses.
If you’re selling your home in late summer, fall, or winter, it’s not a great idea to try and start a bidding war. You may price your home well but only receive one or two offers — don’t corner yourself into a loss!
If you’re selling your home and want to determine its value in the current market, call or text Gino today (204-955-5853)! He has the resources to help guide you to a successful sale that nets you the best possible price in the best time frame possible.
Buyers! Call or text Gino today to assist you with your search. He has a keen eye for what to look for in a home (the good and the bad!) and can help you find the home that best fits your needs, for the best price possible.