Do You Recognize the Early Signs of a Bidding War?

A bidding war happens when more than one buyer offers the same property, driving up the purchase price. The main reason there would be a bidding war is if more buyers are in the market than there are available homes to purchase. Buyers can expect bidding wars in large, population-dense cities. There are sure signs that a bidding war might be about to start and if you are a buyer in the Naples real estate market, being able to identify these signs is essential.

The first reason it’s important to identify a bidding war is so that you do not get taken advantage of with an overpriced home. If there are multiple buyers interested in the same property, the sellers will be able to charge a higher price for the home. If you are unaware of the other offers, you may end up overpaying for your home. Identifying a potential bidding war can help you prepare to make a competitive offer on a home. In some situations, you may even want to walk away from a home that is likely to enter a bidding war, as the prices can be driven up to an unreasonable level.

General market changes can make buyers aware of potential bidding wars in local markets. The first sign that bidding wars are happening in your market is when homes start to sell very quickly. If you see homes that have been on the market for a few days and are suddenly selling in a matter of hours, there is a good chance of a bidding war. Another general sign of bidding wars is when you make an offer on a home, and the seller returns with a counteroffer much higher than your original offer. This usually happens because the seller has received multiple offers and is trying to get their home's best possible price.

So, if you are a buyer in the market for a home and you see any of the following signs, it may indicate that a bidding war is about to start, and you need to be prepared to make quick decisions.

If a home is priced below market value, the property will likely have multiple offers. This is because buyers will see the low price and think they can get a good deal on the home. Numerous buyers will have the same feeling and put in offers, driving up the price of the home. If you are looking at a home that is priced below market value, you should plan to make a competitive offer because the price does not reflect the home's actual value. You may even want to consult with a real estate agent to get an estimate of what the home is worth so that you do not overpay for the home.

If the home is advertised before it is listed on the real estate market, there is a good chance of a bidding war. This is because multiple buyers will be aware of the home, and the sellers may be trying to get the highest price for the home. If you are looking to buy a house and the home is already being marketed, it is essential to realize there will be serious buyers that have had ample time to arrange competitive offers. You can stay ahead of competitive bids and navigate bidding wars by working with an expert agent that can help you create a firm offer and navigate negotiations.

If the home you would like to purchase has a deadline for offers, it can be a sign of a bidding war. Sellers make this strategic move on exclusive properties to make buyers feel a sense of urgency to make their best offers their first offers. These deadlines can drive the price of the home and create a bidding war. This tactic also allows sellers to avoid negotiations and choose the offer with the highest price, making it imperative for buyers to come in strong.

A deferred open house is when a home is listed but does not allow viewings or an open house until the following week. If the seller is deferring the open house, this is a sign that they are aware of the potential for multiple offers and want to get the highest possible price for their home. The seller may be doing this to build interest after listing and encourage buyers to make initial solid offers.

If you are looking to buy a home and are concerned about potential bidding wars, you can navigate the process with the help of an expert real estate agent. By working with an agent, you can have someone familiar with the market, which helps you make a competitive offer and go through negotiations. The agent will be able to identify the trends in the market and will be able to give you advice on how to make smart decisions during a bidding war and when to walk away. It is critical to have someone on your side to protect your needs and financial investment from a bidding war that may put you in a difficult situation. An expert agent can help you identify signs of a bidding war and stay ahead of the competition.

Vincent Branda is a licensed broker and a Naples native with more than a decade of experience in local real estate markets. Vincent specializes in luxury real estate and is an expert in providing clients with top-of-the-line services and results. He is known to secure unattainable locations and help clients find their dream homes. Vincent has a wide range of resources, contacts, and partnerships to ensure clients have a successful experience. Start your home search with Vincent and find houses for sale in Naples that meet all your desires.