“Why are there so many multi-bids situations and properties being sold over asking price?”

“Why are there so many multi-bids situations and properties being sold over asking price?”

QUESTION OF THE DAY~ is where we answer a question that was emailed to us or asked by one of our clients. A question, we feel more people might have, and therefore the answer should be shared. If you do have a question you would like answered, please email us your question to seminar@rightpricedrealty.com

ANSWER: Yes, there are certainly many situations where a property is sold far above the price it is listed at. There are several reasons this may happen:
More than likely, the property was purposely listed at a significant lower price than the seller & REALTOR are expecting to sell or willing to accept. The reason this is done is simple marketing… many people have a very clearly defined budget that they are searching within to find their home. They are either only looking at properties listed up to a certain point and some who are working with buying REALTORS will have automated search engines sending them listings within a specific price range.

Many selling REALTORS choose to price a property so that it falls within several “traditional” searches. For example, a REALTOR may list an East Vancouver home at $748,000. This listing price will draw all the potential buyers that are looking with a price range up to $750,000; as well as all the buyers who are looking to spend upwards of this. The selling REALTOR may list the property at this price even though they know the property is worth $780,000 to $810,000 and seller would not accept lower than $775,000. Studies have shown, the more potential people are involved in the bidding process; the higher the final selling price will be. As a buyer when you first hear this it may sound like false advertisement, it is perhaps a questionable marketing and advertizing tactic that REALTORS may use.

However the selling REALTOR is obligated to the seller and looking out for their best interest. As such, this unique form of marketing serves their client to the fullest. As a buyer you need a great REALTOR, a REALTOR that is looking out for your best interest, knows the market prices and activity. As such, your buyers REALTOR is then able to show you comparables before you write an offer or get emotionally attached to a listing. A great buyers REALTOR will be able to explain to you what the targeted property is worth and what it will sell for, they can also advice you on ways that you can make you offer more attractive.

Source: This is an opinion of Right Priced Realty (Roland)