What’s the over/under on that?

by Shawn Lackie

Every week we continue to be inundated with stories about housing and whether or not areas have under-bidding or over-bidding. We wait in breathless anticipation, to find out where the deals are being had, much like the annual Black Friday or Boxing Day sales.

This is a recent phenomena, one which was never really a big part of the action back in the day. Since the buying world partly lost its mind in 2016 and then fully lost its collective mind in 2019-21, it would seem there is still an expectation every property listed will create a bidding war, or at the very least net the sellers a very handsome return, well over asking price.

Welcome to the new reality. There’s a wildly underused thing, called common sense, which seems to have disappeared the last few years. Yet it looks like it is slowly returning though, at least in the world of real estate. The common practice used to see a home listed and sit on the market for 30-90 days before finally selling. In many cases the seller would be happy to get 80-95 percent of the listing price, and bidding wars came along once in a while.

Sellers these days are petrified at the thought of under-listing their home, for fear they will lose out on the overpaying bonanza. However, here’s the deal, if a house is seriously (or even moderately) under-listed, chances are a bidding war will ensue. Regardless of the time, no one wants to pass up a good deal. So, voila, you have a bidding war and the sale price should end up closer to where the true market value should be.

Whether it is a seller’s or a buyer’s market (or even a balanced market), the bottom line is, the MARKET will determine the value of the home, not the seller, listing agent, or anyone else for that matter. It’s a plain fact.

Conversely, if the home is grossly over-listed it, will sit for months and in most cases, will end up being pulled from the market. Unless, of course, the seller sees the light and drops the price accordingly.

So, in a circuitous way, this leads back to the original theme here. Over and Under bidding. They should stop with this nonsense. Underbidding merely means the buyers are not willing to be gouged anymore. To quote Peter Finch, in Network “I’m mad as hell and I’m not going to take it any more.” So, the buyers aren’t taking it anymore. They are sitting on the sidelines, waiting for more sanity to enter the equation, and maybe even another round or two of interest rate cuts. That certainly helps things.

You never see people rushing out to overpay for groceries or other necessities of life, so why should housing be any different? That is the message which needs to get through to a good number of sellers, who still think it’s 2019. I have a tip for you folks. It’s NOT, so get with the times. In many cases, you will still be making a very tidy profit on your sale. So just be happy with that, it will save a whole lot of stress.

Feel free to check out this story and more on my blog site, at https://slackie14.wixsite.com/buy-sell-and-more