By now who has not heard of a Short Sale? Homes being offered in the hottest price ranges are indeed attracting "multiple offers". The "asking prices" are deliciously tempting and offer an opportunity for people of modest means to obtain a distressed property at a reasonable price...or does it?
THE TASTE OF TEMPTATION
Wetting ones appetite for a bargain, has driven many buyers back into the Real Estate Market in hopes of purchasing a property at a reduced price.
But more times than not, buyers are finding that the homes they see advertised for one price, already have Multiple Offers on them and the Highest and Best Price offer far exceeds the Asking Price.
BUYERS FEEL "Duped"- BUT BY WHOM ?
There are often two sides to any Real Estate Transaction. A seller's side, and a buyer's side. The listing agent uses Market Data (which is a current window to the economic climate of a particular region) along with comparable sales of properties in that local area based on size, condition and location to arrive at a reasonable expectation of price.
If a property is priced below market value, the result is competing buyers may make offers resulting in Multiple Offers being received on a particular property. Buyers attempting to undercut the asking price are replaced by buyers willing to exceed the asking price. In some cases as much as 12-18% over the asking price.
In such cases the lender controlling the property may ask for "Highest & Best Offer" which is paramount to Round Robin Bidding with one exception..no time limit.
SHOULD ASKING PRICES CHANGE ON MLS TO REFLECT THE CURRENT "HIGH OFFER/BID"?
I say yes. It is unfair to consumers in my opinion, for listing agents (and the sellers they represent) to continue to bait buyers by offering homes at prices that are no longer viable due to competing offers.
The Highest Offer should be the new low. Since REO/Short Sale properties do have to conform to Standard Time of Acceptance clauses in most Contract for Purchase , the long delays in answering offers also place buyers at an unfair disadvantage.
ARE BUYERS ARE BEING MISLEAD?
If sellers are pressured to lowered prices in response to a sluggish market, then the opposite should be true in the buying process when sales are heating up. A buyer can tolerate losing a home because their offer was too low, however it gags them and causes distrust when they are re-approached to increase their offer when numerous offers are received.
Without doubt the best way to protect buyers and Realtors® who represent them, is make sure that seller grants permission to disclose information pertaining to Multiple Offers. Adjust the prices to reflect the current price and limit the time for acceptance, so that the process does not linger in perpetuity.
Or perhaps we should just implement a "Buy it Now" Button
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