Selling a property with the strategy of generating competing offers has become common place in today’s market. Bidding on a property has been around since real estate trading was established. Using the right strategy can make a big difference in the final sale price.
As agents you are in charge of all the dynamics associated with presenting and setting up your clients property for bidding competition. Silent Auction Home Bids and iBid.house merely provides the ideal platform that buyers prefer. More bidders means increased opportunity that you will find your sellers that one perfect buyer.
At Silent Auction Home Bids and iBid.house we believe our platform can be a considerable asset in improving your clients satisfaction. Eliminating the secrecy associated with multiple offers is a very effective way of increasing buyer participation and seller confidence that your services got them the highest price possible for their home.
Traditional Multiple Offers vs Silent Auction Home Bids and iBid.house
Selling Agent Perspective
Traditional Multiple Offers
Listing Agreement
Seller has contracted you as their real estate Broker/Agent and put their property for sale as an Exclusive or MLS Listing. At this time you devise a selling plan and strategy based on the sellers wishes.
If the strategy of holding back offers is decided upon it usually means that the Listing Price of the property will be below market expectations in order to drive lots of traffic to the property and generate multiple competing offers.
At the time of listing the property, an OFFER DATE is established setting the stage for buyer competition.
Property Preparation and Showings
After the Listing Agreement is signed then property is prepared for public presentation.
This may involve staging, photography, video presentations, virtual tour, seller home inspection, feature sheets, showing direction, handling and booking confirmation, along with many other tasks to ensure effectiveness.
Offer Presentation Date
On the offer presentation date, interested buyers prepare an Offer to Purchase with their agents and register their offer with the sellers brokerage.
This is when the results of the selling strategy become visible. In a sellers market when supply of property is low and buyer demand is high, combined with the interest generated in your property from an aggressive listing price and attractive presentation, you can expect several competing offers to be submitted.
There is however a growing trend, where some buyers may choose not to submit an offer due to the current ‘secret offer’ methods which is customary and mandated by licensed Broker/Agents.
Offer Handling
Here is where things go very well or take a turn in the wrong direction. This is were your skills as a selling agent become of paramount value.
We will not get into all the details associated with this stage as there are many factors that contribute to the outcome. We will however highlight some of the key factors and concerns faced as selling agents:
- Your Code of Ethics states that you cannot disclose any details of competing offers to other potential buyers. At the same time you are attempting to encourage buyers to offer the highest possible price for your clients. All secretly (but in reality with some persuasion) and any mistake could lead to a board complaint or investigative review.
- Properties can sometimes receive anywhere from 3 to 30 competing offers at the same time. The process of reviewing each written offer can be a long and exhausting process. This can lead to errors or bad choices being made by both you as the agent and your selling client(s). Sometimes, the sellers may have regrets of their decision as the offer review process was a difficult one to go through.
NOTE: THIS IS THE TURNING POINT. Most buyers are familiar with comparable sales and an approximate value of a home. You MAY get the buyer that is willing to come back with a much greater price than others, but as buyers are cautious, you may not. If the best buyer (who was most likely willing to pay a higher price) knew how much more was needed to outbid another buyer, the seller may have most likely obtained a higher price for their home.
- Submitted offers will most likely be a combination of conditional and non-conditional (firm) agreements. There are risks associated with accepting a conditional offer that has a higher sale price and the seller(s) may opt for accepting a lower priced offer because it was submitted without conditions.
In short, your skills as an agent can truly shape the outcome of the offer presentation date in many ways. However, due to the secret nature of the offer handling process, no matter how excellent a service you provide, your seller client(s) are many times left wondering if they could have done better.
Possible Outcomes
There can be several possible outcomes with traditional multiple offer presentations.
- There will usually be one successful buyer whose offer conditions and pricing were preferred by the seller.
- Buyer remorse can be high if the buyer ponders their purchase the next day when submitting their deposit. The question of whether or not the buyer ‘overpaid’ is a common challenge. This may in turn lead to the buyer changing their mind prior to submitting the required deposit.
- There is the risk that if the buyer overpaid for the property, the lending facility may not appraise the property at the same value. This would encumber the buyer to raise more money (which may not be available) in order to cover the mortgage shortfall. If the buyer cannot come up with the shortfall, legal proceedings may follow, and the seller may also have issues carrying two mortgages.
- If the buyer and/or buyers representative feels that the conduct of the selling agent was unfair and violated certain codes of conduct, their is additional possibility of registered complaints and pending investigations.
- Your skills as an agent can truly shape the outcome of the offer presentation date in many ways. However, due to the secret nature of the offer handling process, no matter how excellent a service you provide, your seller client(s) are many times left wondering if they could have done better.
Silent Auction Home Bids and iBid.house Controlled Bidding
Property is Listed and Posted on Silent Auction Home Bids and iBid.house
Listing the property remains the same as traditional methods.
Only now you agree with the Sellers to use Silent Auction Home Bids or iBid.house as a third party service to create and manage the competitive bids between interested buyers.
You, your sellers and Silent Auction Home Bids and iBid.house, sign the Consent to Silent Auction Home Bids and iBid.house form (provide after purchase or Registration Package) and start the process.
Property Showings
Treated exactly the same way as Traditional methods.
Live Silent Auction Home Bids and iBid.house Date
At the time and date determined by the seller the Silent Auction Home Bids and iBid.house countdown reaches launch time. Registered buyers are now able to start bidding on the property commencing from same MLS listing price.
Bid Handling
This is where Silent Auction Home Bids and iBid.house shines. Once a Silent Auction Home Bids and iBid.house controlled bidding occurs on an equal platform for all buyers to openly compete on the property based on price.
Bidding is done in increments determined by the seller and selling agent.
- Suggested: larger increments up until the Reserve Price is met, then smaller increments until the Silent Auction Home Bids and iBid.house Winner is determined.
Sellers are not obligated to accept any sale until the Reserve Price (the lowest accepted by the seller) is reached. Once the Reserve Price is met, bidding increments are lowered and bidding continues until there is one final bidder at the highest price. This will become the Silent Auction Home Bids and iBid.house Winner and the successful buyer of the property.
Documents are then sent out for lawful electronic signing and the buyer is expected to submit the required deposit within 24 hours.
Possible Outcomes
After the bidding process which is controlled and transparent, the Silent Auction Home Bids and iBid.house Winner will have greater satisfaction knowing all along what competing offer amounts were. Buyer remorse is minimal.
Additionally this risk of complaints stating unfair offer handling are eliminated as the platform is unbiased and equally fair to all bidders.
Another benefit from buying through Silent Auction Home Bids and iBid.house is that bidding history strongly supports home value and appraisal amounts can easily be justified.
These are just some of the benefits that buying a property through Silent Auction Home Bids and iBid.house can represent.
Buying Agent Perspective
Traditional Multiple Offers
Buyer Preparation and Property Showings
After discussing the type of property that your client is looking for, the search for the perfect home can take you into many properties of interest. When the right home is found the process of property acquisition begins.
Offer Presentation Date
Here we will focus on the property that ends up in a multiple offer scenario, which happens to be the majority of homes lately. Yes there will be times when homes are priced higher than expected in order to leave room to negotiate, but for comparisons we are only making reference to the competing offer home sales.
On ‘offer presentation day’ you will prepare an offer as per your clients wishes and register your offer prior to to the time stated on the listing.
Many considerations accompany the preparation of such an offer. Those include:
- What price should we submit our offer at?
- Will our offer be competitive?
- Are we leaving ourselves room to come back at a better price?
- Is our price too low that we may not get a second chance?
- What is the true value of this property?
- I wonder what others are going to offer?
….are just some examples of common questions.
Offer Handling
Traditionally, and based on competing offers, the selling agent will review all the competing offers and select a few that they choose to work with. Your offer may one that choose to work with, or send the offer back without the opportunity to consider presenting a “better” offer.
At this point in time you are told that the sellers have selected your offer along a few others to work with. You then have the opportunity to reconsider your current offer and if you will improving your offer in some manner. Limited information can be provided to you from the selling agent so the task of determination your competitive position and how best to guide your clients becomes a delicate manner.
After some discussion you determine your next course of action and hope it turns out to be the right one.
Possible Outcomes
Several outcomes are possible:
- Your instincts and actions are spot on and you succeed in ‘beating’ the other competing buying offers. Or,
- You are unsuccessful in having your offer accepted.
Either a victory or failure over competing offers could lead to some challenges after. Those could be:
– buyer remorse (when the buyers think that they may have overpaid for the property) because they were never exposed to competing offer details.
– agent dissatisfaction if they think you could have got the home at a better price.
– concern over needing to submit a non-conditional (firm) offer in order to improve your offers attractiveness, leaving the buyer hoping they didn’t purchase problems along with the home.
– a true loss of confidence in you as their representative when they discover the actual selling price of the home the wanted was either lower than what their offer amount was, or just slightly more in an amount that they would gladly outbid IF they knew it were only that much more.
Silent Auction Home Bids and iBid.house Controlled Bidding
Buyer Preparation and Property Showings
Same as it would be with Traditional methods.
Live Silent Auction Home Bids and iBid.house Date
At the time and date determined by the seller the Silent Auction Home Bids and iBid.house countdown reaches launch time. Registered buyers are now able to start bidding on the property commencing from same MLS listing price.
They would have already been to see the property, ad you would have given them comparable sales in order to determine value.
You have discussed and established who will be permitted to bid during the Silent Auction Home Bids and iBid.house event., and each individual wanting to participate in the bidding will register with Silent Auction Home Bids and iBid.house as required.
Additionally, the Silent Auction Home Bids and iBid.house property will have all supporting and legal documents made available prior to the live event. You will be able to review all the required legal documents in advance such as; Seller’s Agreement, Schedules, Co-Operation Forms, Closing Terms, etc. In addition and depending on the sellers, additional supporting documents may be made available which could include; Home Inspection Report, Property Survey, Home Upgrade Details, Pool Inspection Reports and many other documents that could support buyer confidence in the property.
Bid Handling
Silent Auction Home Bids and iBid.houseis an open and controlled bidding platform. The most important difference is that from this point on the property is treated like an auction.
Registered buyers compete openly from anywhere in the world via an internet connection and supporting electronic device.
Bids are handled in pre-determined increments. Usually with a larger amount up to the Reserve Price, and then a smaller amount after that.
Bidding is a timed activity. Usually set for a few hours in order to conclude the buying purchase on the same night.
NOTE: Silent Auction Home Bids and iBid.house has a timer buffer built-in in order to avoid ‘sniping’ (last second bids with the intention of sneaking in below value) which will automatically add an additional 20 minutes to any bid placed close to the end of allotted event timer.
Once the Reserve Price has been met, and the bidding has stopped, the buyer with the highest bid is deemed the Winner of the Silent Auction Home Bids and iBid.house event and all that’s left is the official signing of the Purchase and Sale Agreement Documents.
Both representing agents take over from here as normal and conclude all requirements for a successful closing.
Possible Outcomes
Due to the transparent, fair and unbiased medium provided by Silent Auction Home Bids and iBid.house, buyer and seller satisfaction is considerably increased. Both sides are satisfied in knowing that no unfair advantage was given to any individuals and that the competing nature of the event satisfies the seller in knowing that their property achieved the highest and best sale price.
This process leads to:
– decreased buyer remorse
– higher probability of closing follow through
– decreased probability of lower than purchase price appraisal value
– full knowledge of knowing how much more was needed to purchase the home and no possible disappointment with the buyer agent
– an overall experience of closer and satisfaction with the competing situation
– an increased willingness to participate in multiple offers
Silent Auction Home Bids and iBid.house WORKS ANYWHERE AND ON ANY DEVICE
Silent Auction Home Bids and iBid.house is available to real estate markets everywhere.
- (916) 588-0067
- terry.jenkins@C21SelectGroup.com