Housing Market 2023: Why Some Homes Are Still Causing Bidding Wars Amid a Cooling Market
The housing market has been cooling, which means many homes have been sitting on the market for extended periods of time. In some cases, sellers have had to drop listing prices or make concessions to get buyers to bite. But some sellers are still striking real estate gold, with certain properties stirring up bidding wars despite the market at large.
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Here’s a look at some of the factors that could lead to multiple offers, even in a cooling market.
The Home Is Priced Competitively
Being strategic about the list price can set the stage for a bidding war.
“Homes that are priced aggressively to start in high demand or popular areas often attract a lot of interest,” said Cara Ameer, an agent with Coldwell Banker. “If the property is not updated or is a fixer but has been priced below market, you can also expect multiple offers. Properties that are overpriced relative to condition and location are sitting on the market whereas well-priced properties are moving — and moving quickly.”
Ameer has seen this firsthand.
“I have been involved in a few offers so far this year — two in California and one in Florida — where there were multiple offers,” she said. “One home had 40 offers and was a total fixer-upper, so it not only attracted buyers who wanted to buy and move into the home but also investors, as the improved value was substantially much more.”
The Property Is Turnkey
“Properties that are well maintained and turnkey are in high demand right now, as buyers don’t want to do work nor have the financial bandwidth to take on projects, given higher interest rates that mean higher mortgage payments,” Ameer said.
Sellers should consider investing a bit into the property before listing it to attract more potential buyers.
“A seller needs to take the time to prepare the property for sale,” Ameer said. “This means decluttering, painting, addressing any needed repairs, replacing worn carpet, freshening up the landscaping, trimming back trees and bushes, and having windows cleaned, for example.”
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They may need to go further depending on their property’s competition, she added.
“For example, if you are competing with a lot of new construction, you may need to consider updating the counters in your kitchen along with a new sink, replacing flooring and updating baths,” Ameer said.
It’s in a Highly Desirable and/or Wealthy Area
This one is out of the seller’s control, but it’s definitely a factor in creating appeal to multiple buyers.
“In some areas, there simply may not be enough homes for sale to meet the demand from buyers,” said Corey Tyner, real estate investor and founder of Buy Yo Dirt. “This can create a situation where homes that are available receive multiple offers, even in a cooling market.”
“While the market is cooling down on a national scale, there are still some areas, especially in growing Southern cities, where values are still going up,” added Martin Orefice, CEO at Rent To Own Labs. “Another factor to keep in mind is that while many buyers and sellers are just scraping by in this economy, there are still people out there who have money to burn and simply have to have that particular house. This can be especially true in high-end retirement communities or fast-growing rich suburbs.”
The Home Has Unique Features
If a property has features that are highly desirable and hard to come by, a bidding war may erupt when it hits the market.
“Homes with unique or highly desirable features, such as stunning views, a large backyard or high-end finishes, can generate a lot of interest and competition among buyers,” said Mike Qiu, owner of GoodAsSoldHomeBuyers.com.
It’s Staged Well
Even if the home is slightly outdated, staging can go a long way in upping the appeal to prospective buyers.
“Presenting a clean, clutter-free and well-staged home can help buyers to envision themselves living there, increasing their emotional connection to the property and potentially sparking a bidding war,” said Velody Foye-Byrd, real estate investor and founder of Eagle Home Partners.
This extends to the outside of the home as well.
“Making sure the home looks attractive from the outside can help to catch the eye of potential buyers, increasing interest and potentially sparking a bidding war,” Foye-Byrd said.
It’s Well Marketed
“Marketing the home aggressively and using digital tools to reach potential buyers can also help generate interest in the home and increase the chances of a bidding war,” said Rinal Patel, founder of WeBuyPhillyHome.
Joy Aumann, a licensed realtor and founder of LuxurySoCalRealty.com, recommends creating a sense of urgency through marketing.
“When buyers believe that a home is in high demand, they may be more willing to compete aggressively to secure it,” she said. “This can be achieved through strategic marketing, such as listing the home as having an ‘offer deadline’ or by generating a lot of buzz through social media and other channels.”
The Listing Is Strategically Timed
“The timing of listing a home can also contribute to bidding wars,” said Theresa Raymond, principal broker/owner at TN Smoky Mtn Realty. “For example, homes listed right before the busy spring or during the summer often generate more competition among buyers.”
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