12955 Sunset Bluff Ct, Sunset Hills
Competing for a Home: the Auction Effect
Buying a home can be a very emotional process, ESPECIALLY when a buyer has to compete with other buyers.
Auction Effect is a term used when more than one bid is received on a home, and the Realtor is able to establish a competition with one or more bidders improving their bids.
Seen mostly during seller's markets, when home inventory is low, the auction effect, if executed properly, can yield a substantial increase in the property sale price.
A hedge against large price increases that benefits home buyer's is called an escalation clause. While this may seemingly aid in creating the auction effect, it usually creates a methodical rise of only a few thousand dollars over the asking price, as opposed to several thousand dollars more.
Another factor that limits auction effect is when seller's price their homes too high. This usually detracts buyers from getting emotionally charged about a home, and therefore can decline to make an offer, or become more hesitant in the bidding process.
Buying a home can be a very emotional process, ESPECIALLY when a buyer has to compete with other buyers.