There are no real “bidding wars” on the MLS.
That’s right. Despite what the agents say,
there can be no real “bidding wars” on the
MLS because of how listing agents operate here.
Oh, there are multiple offers received on some
homes, just as there are on some ComFree-listed
properties. But while ComFree clients are free to
engage their prospective buyers in a real bidding
war, sellers listed on the MLS whose homes
receive multiple offers may never know whether
they have gotten everything the market has to offer.
Here’s why: For there to be a “bidding war” all
interested bidders must have an equal chance to
respond to the highest bid on the table and know
what they are responding to. That seldom happens
on the MLS because the system is dedicated to
keeping buyers and sellers apart and buyers ignorant
of what conditions they have to meet to buy a
house. The agents just don’t bring all interested
parties together so all final positions can be presented.
Only the buyer who presents the best offer
or accepts the seller’s counter will get the house.
Someone else might have ultimately paid more. No
one will ever know.
Everything is usually left in the hands of the listing
agent to operate behind closed doors. Recently announced
changes to the procedure for handling multiple offers
by listing agents do little to inject more openness and
transparency. That will only happen when all buyers’ agents
are unreservedly permitted to be on hand with the seller
when their client’s offer is presented, as is the case in
other jurisdictions. Buyer’s agent attendance is now at the
discretion of the seller and listing agent. It seldom
happens.
So the frustration buyers have experienced with
the system over the past years of this sellers’ market
is likely to continue.
They’re told to present their “best offer”, but they’re
flying blind.They never know whether they are way over what they
should pay or way under the ultimate selling price.
When they get their deposit cheque back, they
don’t know how close they came or get another
chance to bid.
It doesn’t have to be that way. Let’s compare
what happens with similar homes listed on the
MLS and with ComFree.
On the MLS, the listing agent will often declare
that no offers will be accepted till a certain date.
On that date, let’s say five offers come in. He alone
usually then takes the offers to the seller and presents
them. One may be higher and the agent, who
wants to move on to the next sale, will be happy if
the seller accepts. But the decision may be to
counter.
RECENTLY SOLD WITH COMFREE
Horrox Bay, Riverbend
List Price: $269,900
Sold For: $287,500
Saving in GST
& commission: $18,112
(6% comm./GST)
There are five offers, but only one can be
countered in writing. If that counter offer is accepted,
the home is sold. The other four prospective
buyers will never be heard from again, even though
one might ultimately have been willing to offer
more than the selling price. Money may be left on
the table
Under the new rules for handling multiple offers,
the listing agent can ask a buyer’s agent whether his client
is prepared to amend his offer prior to final consideration.
But he can’t be told what he has to beat. He’s flying blind.
With ComFree, the seller who receives five offers is free to
create a real “bidding war” in which all interested parties have
an equal chance to participate. 37% of ComFree sellers have gotten
more than their asking price this year, most as a result of receiving
multiple offers.
ComFree sellers are informed how to conduct an open auction, or “bidding war”
on their home, and many do. They can poll multiple buyers by telephone or by email,
but some of ComFree’s clients will put prospective buyers in different rooms of the
house and go from room to room setting out the leading conditions then on the table.
Or they may have them all in the same room.
This method can be more open and transparent. It can be a true
auction where responsive, multiple bids can be made in real time.
The winning bidder can know what he has to agree to to get the house.
The seller knows he received as much as the market was prepared to
give him at that time. The losing bidders know they didn’t get the house
because they weren’t prepared to meet the top offer. It was their decision
not to buy the property. They were not flying blind.
Whether you are a buyer or a seller, only you can decide which system you’d
trust more and which you’d rather participate in.
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