Bidding Wars Heat Up in Some Areas
Tight inventories of for-sale homes are causing bidding wars on homes to turn “brutal,” The Orange County Register reports. For example, some home buyers in Southern California say they’ve been up against 18 other buyers in bidding wars for a property.
For some, the bidding wars are causing frustration as they’re forced to get competitive for the home they want and go up against cash buyers.
The California Association of REALTORS® recently reported that nearly six in 10 homes were selling with multiple offers because of tight inventories. This trend is making the market particularly difficult for first-time home buyers.
Homes are receiving an average of four offers, according to CAR’s 2012 Annual Housing Market Survey report. Forty-one percent of homes are selling without a discount too, which marks the highest number since 2005.
“It’s brutal out there right now, especially in that lower price range,” says Bill Arseneau, a broker associate with Realty One Group in Mission Viejo.
Some buyers are panicking as they see prices get bid up. To get more competitive, some buyers are giving up contingencies and trying to make an emotional connection with sellers to stand out, such as by giving pictures of the buyer’s family and a letter to the home owners about how much they like the house and what they plan to do with it. Robert Rivera, a broker associate at First Team Real Estate in Anaheim Hills, Calif., says that after his buyers submit an offer, they’ll write a thank-you letter to help stand out too.