Posted on: 13 July 2018
One of the techniques that a real estate agent may recommend you employ to help your home sell for as much as possible is to create a bidding war for your home. This is a new concept for many home sellers, and as such, you may wonder if you should use this technique or not. Here are a couple of the pros and cons of creating a bidding war for your homes for sale.
Cons of Creating a Bidding War
- Some Markets Don't Have the Traffic for Bidding Wars
A bidding war can only ensue if you have multiple people who are interested in bidding for your home. Some markets do not have enough buyers to pull off this mission. There may not be enough people interested in buying homes at the moment, or buyers may have shown that they will walk away in that market if the idea of a bidding war comes into play. As such, your market needs to be able to pull off a bidding war, or it won't work.
- Homes May Not Appraise for the Bidding War Price
The other major disadvantage associated with bidding wars is that a home may not always appraise for what people bid for it. If this happens, the buyer may be unable to secure their loan, and they may have to walk away from the deal. This can be detrimental, especially if you are trying to sell your home fast.
Pros of Creating a Bidding War
- You Maximize What Your Home Sells For
One of the biggest benefits associated with creating a bidding war for your home is that it helps to maximize what the home sells for. Trying to price a home can be tricky. You never have to wonder if you could've gotten a few thousand more for your home if you raised the price of your home when you create a bidding war. It will go for the highest price that a buyer will pay.
- If You Don't Create a Bidding War, You Don't Have to Sell Your Home
The other benefit associated with creating a bidding war is that you are under no obligation to sell your home if it doesn't get the interest you expected by pricing it low and trying to create a bidding war. You can simply decline if only one offer comes in, and then relist the home at a higher price. As such, there is little risk in trying to create a bidding war.
A home is only worth what someone will pay for it. And a bidding war allows you to test the waters and see what people are willing to pay. A real estate agent can help you to price your home to create a bidding war situation if you feel this is a technique you want to use.Share