Are buyers bidding above market value

Are buyers bidding above market value


bjbjR Todd: Hello and welcome to Todd Miller
TV joined here today with Oana. So there is a phenomenon going on right now where we have
multiple offers and everybody bidding over a list price. Oana: Yes. Todd: And then some
lucky person gets the property. But then for some reason, it s falling out of escrow. Oana:
Right. Todd: So, let s talk about why that s happening. Oana: OK. So, we have very little
inventory. Todd: Right. Oana: We have reasonable demand. However with the small inventory levels,
that means that we actually have a lot of demand. OK? So, buyers are bidding more than
they can either afford or more than they think the property is worth because they get emotionally
wrapped up in winning the bid. So, we ll have multiple offers. We ll have maybe 10, 12,
14, 20 offers on a property and then we ll have a winner which is wonderful. Congratulations.
You won the house. And then a week or two later, they back out. Todd: OK. Oana: Because
they ve got buyer s remorse. They maybe can t afford to pay that much for the house or
they don t think the house is worth that much or some person in their family or their co-worker
or their friend has told them that, Oh well, you re overpaying for the house. Whatever
the reason is, they back out. So then we have to start the process all over again. Todd:
OK. Oana: So I want to say a couple of things. One, if you re the person who got the house,
stick with it. Close on the house. Please. Two, if you didn t get the house, don t worry
about it. The person who did is probably going to back out. Todd: OK. Oana: Stay in there.
Stay in the game. Come back to us when the property goes back on the market. Todd: Is
there a price range you re seeing this in more than another price range? Like is it
happening, 200 to 250, 150 to 200? Oana: I wish I could say that it s happening in that
particular price range. But it s really happening all the way across the board. Todd: Is it
happening more with investors or with owner occupants? Oana: Owner occupants every time.
Todd: OK. Here s a quick because this is what I get all the time. Someone will show up.
Come into our conference room for buyer consultation and they will say, ve got a lot of time to
look and we want to find the perfect house and we want to get the deal. Is this the kind
of market to find the perfect house and get a deal? Oana: This is the kind of market to
find the perfect house and forget about getting a deal. If you got the house, you got the
deal because look, depending on who you listen to, in the last month, I ve seen statistics
ranging anywhere from Vegas has appreciated anywhere from 20% to 27% year over year from
2012 to 2013. And particular zip codes and numbers are different obviously because they
re looking at the whole valley. But whatever it s appreciated, we can all agree that prices
are higher today than they were a year ago. I don t care where you are in Vegas, prices
are higher today than they were a year ago. So if you got the house, you got a deal because
the other person didn t get it. So the next house to go on the market in the neighborhood
is probably going to sell for more. So you got a deal. Stick with the deal. I have properties
that had now been on the market between a 120 and 170 days and it s not that there was
anything wrong with the house, is that I keep putting it under contract with buyers and
they keep getting buyer s remorse. They keep backing out and I have to do it all over again.
And it s very sad for the people that are actually putting in these offers, not getting
the houses and they would have closed on the house. But somebody else beat them out and
they re not closing. Todd: OK. So what s the advice for somebody who is frustrated right
now because they re trying to buy a house, there s a shortage of inventory. They know
prices are going up and they want to get in before a year from now when the same house
is likely going to be more? Oana: OK. Honestly, my best advice is look for a Fannie Mae house.
Use HomePath financing so you re not handicapped by appraised value. Todd: OK. Oana: Pay for
the house what you think it s worth to you. When you win the bid, stick with it. Close
on the house. Move in. Live and be happy and in your home. Todd: OK. I like it. Good. All
right. So that s my update for today. And hope to see you on another video. Thanks.
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4 Comments

  • Ddr Hazy

    April 9, 2013

    People are bidding on multiple properties and sometimes win multiple bids. When that happens they have to choose one and we're left with the problem you were discussing.

    Sometimes people's financing is not in order and is not realized till later. I once had a property go thru all the stages of escrow and the day the house was to close, the lender said there was a problem and the entire deal fell through. I even had to give back the EMD because the house would sit in limbo if it wasn't cleared.

    Reply
  • Divaholic_Lifestyle

    June 11, 2013

    This has been soo helpful thank you so much

    Reply
  • Divaholic_Lifestyle

    June 11, 2013

    I thought bidding on multiple houses at one time is illegal?!

    Reply
  • wolfmanml320

    March 19, 2014

    Can sellers goto the 2nd or 3rd highest bidder to avoid this problem ? On ebay this is a problem to. Could it also be other sellers bidding up the property for thiers to sell ?

    Reply

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