Are bidding wars happening in your area?

With limited inventory on the markets recently, bidding wars have been making a comeback, according to Core Logic.

While no Pennsylvania cities made the top 30 list, that doesn’t mean Realtors® across the commonwealth haven’t been experiencing bidding wars in their market.

“I have not seen them in recent years until recently,” said PAR’s President Todd Polinchock.  “A well-priced home that is in quality condition can easily create a multiple-offer situation. It can actually drive the price higher than the original list price, which I have seen several times.”

Kathy McQuilkin, PAR’s president-elect, said she has been seeing multiple offers on homes that are accurately priced, in excellent condition and are well-staged.

“As always, all real estate is local.  It is occurring more in price ranges at or below the median price for that particular area and in neighborhoods, townships and towns that have a dearth of available listings. Activity is clearly affected by the condition, lot and amenities. We try to be very careful to encourage our sellers to price properly and work with our professional staging and professional photography  to help prepare their home for the best possible market launch. We want to create a market buzz right at the launch to have the best chance of encouraging multiple offers,” she said.

Jodi Diego, president of the Greater Harrisburg Association of Realtors®, said she has also seen the return of bidding wars in the area. “As far as bidding wars in our area, yes, we are still having them,” she said. “I personally have had this happen on some of my listings, and have spoken with a number of other co-brokers having them too. It is all about the location, price and the product. In speaking with my fellow associates on both sides of the state, we see this happening across the board, with the interest rates so low and the sellers really listening to their agents’ recommendations, their hard work usually pays off with the reward of multiple offers.  Also, we are finding that when the homes are really turnkey, the days on market are far less, going back into a week to 10 days in certain market areas.”

Are you preparing your clients for a possible bidding war? Both buyers and sellers should be aware of the potential of a bidding war impacting the price and/or sale of a home.

“By doing our due diligence, and paying close attention to our markets, we are the experts and that is what our clients look for in their real estate professional. If we can make our homes be the shiniest penny, we will see the fruits of their labor,” added Diego.

McQuilkin echoed: “With buyers, we educate them on the areas and price ranges that have the greatest chance of multiple bids—either due to pricing, popularity and scarcity of listings, etc. We walk them through the process of general purchase, the search area prices, costs and typical housing stock and also the multiple offer scenario. They will know that they need a pre-approval, completed buyers’ financial information form and ability to quickly review the comparable market analysis that we prepare for the particular property. We also educate them during the search process so that they are well prepared for the comparable review and offer process-including multiple offer situation.”

She also suggested having buyers write a personal letter to a seller in a home purchase situation, regardless of whether there have been multiple offers or not.

“At times, a seller will consider the letter contents in their decision making. We also stress the importance of having all the necessary documents included with the offer to make it as easy as possible for the listing agent to present their offer from the start. We want to anticipate questions from the list agent and seller and provide the answers up front, sort of like ‘staging’ your offer to give it the greatest chance of being chosen,” she said.