More Overbids For Your Monday

It’s another Monday, and the madness continues.

Address BR/BA/Units DOM List Price Sold Price Overbid
3691 17th St 3693 2-4 Units 16 $1,499,000 $2,200,000 46.76%
127 Central Ave 129 2-4 Units 60 $1,200,000 $1,720,000 43.33%
152 Hancock St 2-4 Units 26 $1,100,000 $1,557,000 41.55%
82 Peralta Ave 3/2.00/N/A 28 $998,000 $1,380,000 38.28%
1628 York St 3/2.00/N/A 17 $1,095,000 $1,458,000 33.15%
130 Randall St 3/1.50/N/A 7 $1,195,000 $1,575,000 31.80%
325 Precita Ave 3/2.00/ 18 $925,000 $1,216,000 31.46%
327 Richland Ave 3/1.00/N/A 35 $749,000 $980,000 30.84%
4430 Cabrillo St 2-4 Units 14 $925,000 $1,200,000 29.73%
1108 Cabrillo St 3/1.50/N/A 11 $1,295,000 $1,677,000 29.50%

[Copyright ©2013 TheGoods-SF.com. Visit www.thegoods-sf.com for more information. Data feed from SFAR MLS deemed accurate but not guaranteed.]

Some overbids that were featured last week are still on this list until they get knocked off.

To answer some questions that popped up in the comments of our last overbid post about intentional underpricing to generate overbids…yes, there is certainly a lot of that out there, but there is also a lot of uncertainty as to what is a correct market price for any particular property when comps continue to escalate. And yes, there are agents that intentionally underprice, not in an effort to be fair and competitive for the market, but in an effort to boost their personal marketing strategy, and that’s just plain wrong.

The name of the game in our market is when you have doubts, price it low and let the buyers set the price. It’s almost always better to price low than high. However, what’s more interesting to us is not the amount over asking a property sells, but the number of offers that come in to generate such a fever pitch. We wish MLS had a metric requiring agents to post the number of offers that came in when a property sells, but who knows if that would ever happen. In any given overbid situation, you can assume there would be at least four to five offers. That seems to be a good average, but really it only takes two offers to drive the price up, and you certainly don’t need 20 offers. That means in any given multiple offer situation, one person wins, many lose, so when another similar property ultimately hits the market in a week or two after that, add another new buyer or two to the interest, multiple offers happen again, one person wins, many lose. Repeat over and over again and you see how prices get bid up, and frustration grows to the point where a buyer that has lost out several times in a row ultimately says, “Eff it! We’re going to win this one, so we’re going big.” They finally win. They become the Maximum Overbid of the Week, and they could care less. The feeling of relief is indescribable for many buyers. All of the searching, the reviewing disclosures, the inspections, the loan pre-approvals, the touring open homes, the emotional thrill of thinking you found your home, then depression of seeing it slip away, all of that is done and gone. As a buyer, you can prevail, and there are strategies to increase your chances of success.

As a seller, it’s not as relaxing as you might think, and it can be stressful rolling the dice and asking for more from buyers that are already offering waaaay more than you expected. Even more stressful is getting a pre-emptive offer and having the nagging thought in your head of whether you could get better than that bird in hand if you wait and get to your offer date. It’s a fine line between getting greedy and getting burned, but it certainly provides for good party conversation, which is why we provide this stuff to you!

As a bystander, blame should not be placed on the shoulders of Realtors claiming they intentionally underprice to generate overbids. The goal of listing property for sale is to get sellers the maximum amount of money possible. Currently, creating an environment that will generate multiple offers for a seller is what works, and it works well. We’ve been blogging about the real estate market long enough to know that the majority of comments against overbids come from bystanders, or buyers that continually get beat up…and it’s frustrating. We know all too well. But as a seller, we have yet to meet one that is unhappy with 15 offers (all over asking), many of them waiving inspections, and many of them cash that can close in five days. Regardless of how much over, under or at asking a property sells…it ultimately sells at market price.

So let the overbids continue, let our market climb, let our economy flourish, let jobs be created! San Francisco is on fire and there really is no place like it…so like a favorite band of ours says, “Embrace the Chaos”. Extra points if you know the band….

Happy Monday! Get back to work.

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