The Four Best Ways to Start a Bidding War on Your Home
Unlike the weather, the real estate market this June wasn’t as hot as usual, with the typical home selling for 0.3% below asking price, according to new data from Redfin . While this is a welcome shift for homebuyers, those preparing to put their home on the market now face a more difficult sale.
At the same time, you may have heard about homes in your area that sold for more than their asking price after a multi-party bidding war and wondered what they were doing right. As it turns out, sellers can use several tactics to improve their chances of getting similar results. Here are some Realtor-approved ways to spark a bidding war.
How to Instigate a Bidding War When Selling a Home
In theory, all you need for a bidding war is at least two people who like the house and have the money to offer more than the asking price. You might hope that you’ll get lucky and it will happen on its own, but according to Dana Hall-Bradley, a Realtor with Better Homes and Gardens Real Estate Fine Living in Celebration, Fla., and Joe Muck, a Realtor with J Muck Realty , there are several ways you can make your home more attractive to buyers and increase your chances of receiving multiple offers.
First, there are proven methods: price your home below the competition, hire a successful realtor, make it available for private showings, hire a professional photographer to take listing photos, redecorate the interior, improve curb appeal and make sure the… your house smelled good during a trade show or open house.
If you’ve done all this and your freshly painted Colonial still isn’t attracting all the buyers to your yard, here are a few other tactics to try:
1. Set a deadline for proposals
Instead of listing your home and waiting for offers to come in, this will help create a sense of urgency. “Timing an offer is a good idea if you already have an offer that your customers like,” says Much. “This could encourage those sitting on the fence to submit a proposal and perhaps even include an escalation clause, which could encourage the current proposal to do the same.”
Once you receive more than two offers, have your Realtor write to potential buyers something like, “We have received several offers. The seller has asked all buyers to submit their highest and best offers no later than 7pm on Tuesday.” At this point you can also add a string to the list with the appropriate effect.
2. Answer all offers
So someone has submitted a low offer on your house. Instead of getting annoyed and ignoring the message, use it as an opportunity to talk about your property and the interest it is generating. When you (politely) respond by thanking them for their offer, you can also mention that you’ve received several better offers. This way, if they are truly interested in your home and have the money to buy it, they will know that they need to step it up.
3. List your home for the holidays.
Mack recommends this strategy for two reasons. First, there are fewer homes on the market this time of year, so there won’t be as much competition. Plus, “you can show how your home ‘feels’ at a time of year when that’s top of mind for many buyers,” he says.
4. Host a luxurious open house
If you’re having trouble attracting people to public and private showings, you may want to consider holding an open house that’s more like an event.
“ I highly recommend holding a ‘unusual’ themed open house or broker open house to generate buyer interest,” says Hall-Bradley. “[This] makes it a more interesting and attractive preview location for local realtors/brokers,” and in turn makes them want to market your home to potential buyers.
But you’ll have to get creative: baking a few dozen cookies and hanging a few balloons on the mailbox won’t do the trick. Here’s what Hall-Bradley suggests:
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Hold an event immediately after the property is listed.
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Create personalized invitations to match the theme.
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Advertise some promotion. “The local spa in our town used to give spa gift certificates,” she says. “The guest left their name or business cards, and after the event we had a drawing.”
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Prepare a goodie bag for each guest, perhaps including some local produce from your area.
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Roll out the (literal) red carpet for guests, especially if it’s a higher-end home.
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Have an open bar with themed cocktails.
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Order appetizers from a local chef.
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Offer a photo booth where potential buyers will need to provide their phone number or email address to have a photo sent to them.
For example, one summer Mac hosted a social ice cream open house that included an ice cream truck, which led to a bidding war. “[It] encouraged families to come to the open house and view the house, but also gave them an idea of what life in the house would be like for their family,” he says. Mack also hosted a lakeside barbecue as an open house for the lakefront property, which also generated multiple offers and resulted in the home selling for more than the asking price.
“By making your open house a memorable event, you’ll create a buzz that will attract serious buyers and highlight the uniqueness of your property,” says Hall-Bradley. “This approach can make potential buyers feel special and excited about their future new home.”