Hoboken Real Estate Bidding Wars are Back
[Continuing the reader contributed series “Cornering the Market,” written by Brian Murray]
Going, Going, Gone!
Hey Hoboken Real Estate, news flash: The bidding war is back! Thought the halcyon days of bidding wars were over? Well, they’re back.
Low inventory levels have pushed buyers past the “it’s a buyer’s market” mentality. The caveat being the property has to be priced right and be decent. No renovations needed, no walkups, good building with a good reputation. This is good news for sellers and better news for buyers.
The bidding war: A buyer’s best friend.
This is not a misprint.
Bidding wars actually help buyers more than sellers. Sellers want to get the highest price in the least amount of time with the least amount of hassle. Those are three often competing agendas. A buyer wants the lowest price or stated another way a buyer doesn’t want to over pay.
The one buyer-one seller scenario puts both buyer and seller at risk. A seller with a fair priced property will negotiate with a buyer and usually give some discount off of the asking price. (3-5% in the average on Hoboken Condos) So Mr. Buyer and Mr. Seller agree on $480k for the home offered at $500k. Then Buyer number two comes along during attorney review swoops in and takes it away from buyer number one for $505k. ( I have clients that I coach on this all of the time.) Buyer one is out and never gets a second chance. The seller might not have gotten top dollar but can’t risk alienating two parties.
A bidding war (not an auction) gives each interested buyer one opportunity to present their highest and best offer from which the seller chooses. Buyer’s should love highest and best. It gives a buyer a chance to truly value a property and come up with an offer that if not accepted, the buyer can walk away knowing that they gave it everything they should. This is preferable to an auction because an auction can be an emotional process where winning supplants common sense. The buyer will often win an auction and then develop buyer’s remorse and back out. The losing bidder has likely moved on and the seller is left holding the bag.
So welcome back bidding wars.
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