I'm seeing more and more a situation that I thought was to be extinct for some time. Back in 2004 and 2005 many of my buyers were faced with bidding against multiple offers on homes. By the time the bidding war was over, the home sold for well over asking price. I had many cases where my buyers would lose the bid on a home and start all over again on another home. This would go on for up to a dozen times.
Fast forward to today. A completely different market where homes have dropped in value up to 22%, foreclosures dot the landscape, and banks own more real estate than they know what to do with. Yet, I have clients who are trying to buy a home as soon as it gets listed and they are being beat out by other bidders. On one house, the seller told me that they had some 20 offers. Whats going on here?
Don't get me wrong, most homes are taking a long time to sell and buyers are in control when it comes to negotiating a great price. Where I am seeing the 2004 style bidding wars is on Bank Owned homes. These are properties that the bank foreclosed on and evicted the former homeowners. Many times these homes go to the banks in horrible condition-- damaged walls, broken fixtures, filthy carpeting, etc. Some banks fix the homes up to make them sell faster and they do.
There are some really nice bank-owned homes available at a great price. These attract many buyers and the inevitable bidding wars. Its very frustrating to buyers who don't expect to compete with other buyers when every newspaper talks about a buyers market. Still, these bank-owned homes do sell for bargain prices compared to most other homes. And the buyers do feel that they are lucky in getting what they believe is a better price than what the average buyer is spending on a house!