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Originally posted by 1s1k:
My house sold for $5000 over asking in St.Louis 4 years ago. There was two couples who really wanted it. My Realtor told both couples to put in their best and final offer and one was over asking. I'm sure it's not super common but apparently it does happen. I'm surprised in all the dealings you have had it has never happened when it happened to me on my one and only house in St.Louis.

It really depends on the market. There was a period in the SF Bay Area when it seemed like everything was going over the asking on the first day that they were “accepting offers”. For some folks, that was reason enough to punt and rent for a while until things settled down. For others, it brought out the crazy offers.

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Originally posted by a1abdj:

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but if the buyers don't know what the other buyers are offering, it's not an auction.

Sure it is, by legal definition.

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An auction is a form of sale. In an auction, property is publicly put up for sale. An auction has a seller and a varying number of prospective buyers. Thus, an auction can be defined as “the public sale of a property to the highest bidder.

Again, I'm not talking about "taking offers". I'm specifically talking about agents who intentionally underprice listings in order to start a bidding war which will result in a higher than list price.

I have no problem with people who want to list property for sale, for a price, and accept offers. I also have no problem with those who wish to auction their property. What I do have a problem with is pretending that you're doing one, when in fact you are doing the other.

I think where we are disagreeing is just a matter of semantics. There certainly is usually some consideration of what price will get the most interest and there is always hope of a bidding war. That being said my GF is usually trying to talk people down on price simply because the house isn't worth what the seller thinks. Also there is a huge price to pay for overpricing, as I mentioned before. You want to be priced very close to actual value.

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Originally posted by Rey HRH:
In the hot market before 2008, sellers were even having to write a "Please pick my offer" letter to the home buyer like a kid writing an acceptance essay for college. Seriously.

This has happened in both homes we lived in and sold in CA. We sold our first house in the spring of 2005 after two open houses and packed crowds. We chose the best offer out of 8, most of them accompanied by letters of introduction and reasons why we should choose their offer. Our last house was similar, but in just one 3 hour Sunday open house, had hundreds of people walk through the house with almost 70 of them signing the entry registry my realtor had near the front door. We canceled the 2nd open house and started to accept offers on Wed. On Thurs, we pored through seven offers and each one also had letters attached, including the one we accepted, with a page written by the buyer's kids.

Of course the letters had no bearing on our decision which offer to accept. Price and contingencies were the deciding factors.

Real Estate markets fluctuate constantly.

Some years it's a seller's market other years it's a buyer's market.

In a seller's market, any house on the market will draw buyers. When the dust settles the house will often go for higher the asking price.

I know one house it went on the market and sold for 200K over the asking price. There must have been 50 people at the open house a day.

In a buyers market, you can wait for a long time to get one reasonable offer on a house.

It's just supply and demand.

Low-interest rates and low unemployment usually make for a seller's market.