Sacramento Home Buyer Says: I Do Not Want to Be in a Bidding War
In Sacramento real estate I often hear expressions reiterated over and over such as I don’t want to give away my house and my new favorite: I do not want to be in a bidding war. Personally, I don’t know of any seller who is giving away her house, so that’s a goofy expression. I take it to mean they want to negotiate; they want market value, and that’s a more positive way to phrase it. But buyers who say they don’t want to participate in a bidding war, or in other words a multiple-offer situation, well, they generally don’t have much choice, to tell you the truth. If it’s a nice house, others will want it.
The problem that arises is a buyer’s perception of what a “bidding war” means. An agent told me yesterday that her client does not want to pay $10,000 over list price in a bidding war. I was dumbfounded. Where did they get that number? That was so 2012. Those days of buying homes in Sacramento are gone. We might be receiving 2 or 3 offers on a home now instead of 20, and those offers mean you will pay list price or very close to it. If a buyer has to offer a little bit more to make the offer attractive, generally it’s by a $1,000 to $2,000.
And smart agents will wrap those small incentives into the closing costs anyway, and not in the sales price. Because they know we listing agents give our seller’s net sheets to show how much they will receive when multiple offers arrive. It’s the best way to compare those offers.
A bidding war means a Sacramento buyer might be in competition with one other buyer. And maybe that other buyer has a doofus agent who advises them to offer under market value as many of them do these days for no ungodly reason. If that’s the case, and odds are it is, a #2 buyer can buy that home just by writing a clean offer at list price.
Multiple offers don’t always mean what you think. They don’t always mean a bidding war. If a buyer doesn’t want to make an offer on a home that some other buyer wants, it’s possible that buyer might not buy anything. It’s worth the small risk to sign your name to a purchase contract and let your buyer’s agent go to bat for you. Don’t let words scare you.