How High is not too High?
In today’s market, there is no doubt that bidding asking price is wasting time. But after analyzing COMPS, buyers always feel puzzled, pressured and tensed, “How high will this go?”, “How much higher should I put down?”. This is especially true after being defeated in several previous biddings.
There are several ways to bid in multiple situations and protect yourselves:
1. Have your representative check out with seller agent before the offer deadline of EXACTLY the offers seller side has received in hand. The more your agent find out the “war situations”, the better is for you to react.
2. Figure out the increment of the bid according to the number of estimated offers seller may have.
The closer your offer compared with the top other competitors, the more chance you will be in the “semi-finals”.
3. Create clauses to increase your chance of winning. You want to get into the game first, then excel others in the “semi-finals” – counters. I have seen all kinds of clauses buyers create to differentiate from all bidders, such as: “will add x percent more than the highest bid, but not exceed x dollar amount”; “Upon acceptance, I will increase x dollar amount of deposit”, are just few examples.
4. Once buyer entered the “semi-final” field, buyer actually has more control of the situation. Because the price range is clearer, buyer can decide whether to go or forgo with the bid.
The price definition: a willing seller wants to sell and an able buyer wants to pay.