Is the blind bidding process we have in place for home purchases really better for the seller?

Why aren’t houses sold like nearly everything else with transparent bidding for both buyer and seller.

I was a FTHB recently and one of the shocking parts of the process was the information asymmetry between buyer and seller. Why are homes one of the only financial assets that don’t follow an ‘efficient market’ template where the going rate is visible to all parties? Because it is one of the only assets that uses blind bidding, I suspect it is less efficient overall. Maybe realtors push this to give themselves a role in the process to prove value? Maybe it is easier for realtors to handle but worse for their clients?

As a buyer you have no idea what the competing bid is so all you can do is guess. That could be high (good for seller bad for buyer) or low (bad for both). If you bid low your offer will be rejected and you’d move on even if many people WOULD pay more if they new what number would do the trick. Since there is no information though, they hold back since they don’t want to overpay on a house compared to what it would take for them to get it.

When I sell my house and if competing offers are still a thing, I am considering testing this theory and posting the key points of the current best offer for all to see. Maybe with a 2 week ‘bidding end date’.

submitted by /u/1e6throw
[link] [comments]

Why aren’t houses sold like nearly everything else with transparent bidding for both buyer and seller. I was a FTHB recently and one of the shocking parts of the process was the information asymmetry between buyer and seller. Why are homes one of the only financial assets that don’t follow an ‘efficient market’ template where the going rate is visible to all parties? Because it is one of the only assets that uses blind bidding, I suspect it is less efficient overall. Maybe realtors push this to give themselves a role in the process to prove value? Maybe it is easier for realtors to handle but worse for their clients? As a buyer you have no idea what the competing bid is so all you can do is guess. That could be high (good for seller bad for buyer) or low (bad for both). If you bid low your offer will be rejected and you’d move on even if many people WOULD pay more if they new what number would do the trick. Since there is no information though, they hold back since they don’t want to overpay on a house compared to what it would take for them to get it. When I sell my house and if competing offers are still a thing, I am considering testing this theory and posting the key points of the current best offer for all to see. Maybe with a 2 week ‘bidding end date’. submitted by /u/1e6throw [link] [comments]

<a href="Read More“>View Full Article

Need More Commercial Real Estate Leads?SAVE 40% this month!

Our commercial valuation calculator was created to evaluate commercial real estate. In 6 quick steps you will know your NOI, CAP RATE, and IRR.

Now you can get your own branded version of our calculator!