#31
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@^
I know little about real estate sales but I have lived and done battle in one of the most competive real estate markets in the USA. There is competition to win properties, there is the fudging of an opaque market in demanding a "final and best" offer which forces upping a bid just because a buyer cannot assume his competitor buyers are standing pat. But that is a long way from a bidding war. IMO bidding wars are largely a fantasy. A highend buyer has the financial resources to be flexible in a bid but will be restrained by the savvy to know not to overpay for a property. A mid to low end buyer will not have the financial resources or credit power to bid against similar buyers in their segment of the RE market. Silicon Valley is its own animal because of the scarcity of land and lot size. Zuckerberg bought a bunch of adjacent properties to his home at astronomical prices - 'Cos he could do it and it was the only way it could get done. But there is almost no place else in the world like that and I'd include Manhattan as not as crazy as Silicon Valley. I don't know how hot somebody means when they say hot. But I've sold and bought in a hyper-competitive market and I laugh at the ideas that bidding wars happen. In the post-Lehman era, I'd say few and far between because to the averageJoe it was easy to go crazy bidding on property with money during a time when the banks were begging consumers to take it and spend it. Going crazy with someone else's money is easy, at least that's what it feels like to an unsophisticated buyer - until it's time to pay the piper. Smart savvy buyers do not enter into bidding wars. |
#32
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Agent here...
"Bidding war" is just an overdramatic and overused term that has been embraced by the general public. I hear it used frequently when two parties have made offers on a house and drive the price up by $2500 over list. Not exactly a war but it gives people something to talk/brag about.
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I'm riding to promote awareness of my riding |
#33
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Real estate can feel rigged - moreso as a buyer in competitive markets than as a seller. A house seller takes the biggest number a buyer can make good on. A house buyer puts up as big a big number as the bank will let him have. As an NYC apartment buyer it is not enough to price an asset correctly but to adjust pricing up or down accordingly for street, building and location. In addition to as well for depth, liquidity and aggressiveness from competitive buyers for the same property. Doing all of this'd be fun except that it is competing for a place you want to live. And just having the winning bid is not enough because in NYC there is the co-op board process to get approval to buy into the building. Whereas buying a house is mostly satisfying the bank, buying a co-op is like buying an apartment and joining a country club at the same time - they wanna know who you are and they wanna see all your money. Good buildings wanna see lotsa money. Finally, even if there is no bidding war, there still exists competitive bidding. If you wanna win, ya gotta know if where an asset is listed at is correct and price your bid accordingly. So in the NYC suburbs a reasonable price over list is not $2,500, it is $50k. In Manhattan, a reasonable price over list is $125k. And of course there is stuff listed at $150k over comp equivalent which will just sit there. Most people buying Manhattan real estate are not stupid. I think it only got stupid in all of RE during the height of the housing bubble when people that didn't belong in the housing market got pushed into it by high pressure mortgage brokers and easy money from the banks. Those guys weren't that bright. But home ownership is every person's dream, right? Sorry if this is boring stuff but I found it utterly fascinating. Like high stakes gambling with big numbers and real skin in the game in a fairly opaque market structure. Maddening. |
#34
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A high end home buyer in NYC or most places is not worried about what a bank will let him have. Cash is normally an option and should be at the highest end of the market. Jeff |
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