Offers have to be highest bid...is this the new way to buy?

[pangyal]

I saw an attractive listing in one of my listing notification emails this morning, and emailed the broker asking to put in an offer. The broker replied with the number "that the bidding was up to" and outlined the minimum that I would need to offer to be "the highest bidder". Has buying turned into an auction style across the board- is this the norm? Or just this one broker? It's discouraging, as I would hope that contracts are posted at a reasonable selling price and the first offer to purchase should get it. I bought my last contract at asking, and would have hated to have to get into a bidding war. Anyone lese have experience with this?

 

[Hogzilla]

Unless the asking price was low to begin with, this sounds unlikely to become the norm. If a contract isn't loaded with a lot of banked points, the prices are pretty consistent and usually they are selling BELOW asking price in my experience.

 

[tjkraz]

It's not unheard of where real estate is concerned.

I doubt it will become the norm. Hard to comment on this one situation without knowing specifics. But from the perspective of the seller and his agent, if you received interest from multiple parties in a short period of time, why WOULDN'T you try to leverage that into a higher return?

 

[pangyal]

It's not unheard of where real estate is concerned.

I doubt it will become the norm. Hard to comment on this one situation without knowing specifics. But from the perspective of the seller and his agent, if you received interest from multiple parties in a short period of time, why WOULDN'T you try to leverage that into a higher return?

I would have no problem with that, but the clear message from the broker was that this had been set up as a bidding war situation from the get-go. I guess it worked, because the current bid was higher than the average for that resort.

 

[Lakegirl]

I agree with Tj on this one.

 

[Minniesgal]

If I were selling my points and I had several interested parties offering i'd certainly want it to go to the highest bidder and not the first to offer. I think that would be normal. That said i don't see that many contracts attracting that much attention.

In this case if the seller had already received a higher offer than you wanted to offer I don't really see much point in your lower offer being presented.

Although when i sold a small 40 point contract last month the first offer i got was so low i would have pulled the contract before I sold it for that but the broker said she presented it anyway as she was obligated by florida law to present all offers.

At the end of the day if what you want to offer is lower than someone else is already offering it isn't going to attract much attention from the seller.

 

[pangyal]

I agree as well, but I was surprised that the broker told me that it had been listed low to attract multiple bids. I realize I left that part out in my initial post.

 

[Minniesgal]

I agree as well, but I was surprised that the broker told me that it had been listed low to attract multiple bids. I realize I left that part out in my initial post.

This is a strategy that is used in real estate to get people across the doorstep to look inside the home, and certainly where i come from works well and is used often.

Interesting that it works also for that you know what you are getting without having to go look.

 

[pangyal]

This is a strategy that is used in real estate to get people across the doorstep to look inside the home, and certainly where i come from works well and is used often.

Interesting that it works also for that you know what you are getting without having to go look.

Exactly- I know it's common with houses, but I hadn't seen it used so explicitly for DVC resales before!

 

[DVC Doctor]

If his was an OKW listing then I too wanted it at the list price but it went way up, over 50% and I gracefully bowed out.

 

[pangyal]

If his was an OKW listing then I too wanted it at the list price but it went way up, over 50% and I gracefully bowed out.

Actually, it wasn't OKW. So it seems that this is more common than I realized.

 

[Dean]

I believe they have to legally present all offers. IMO it's unethical to do so purposefully but I could see it happening on the fly if they got severaly inquiries in a short period. Unless this were something that was difficult to get, I'd rather pay more than deal with a company who operated this way. As I've said before, I think some of the companies actively attempt to control (and with some success) the resale prices including refusing to list for people who actually want to advertise at a price lower they they feel is what it should be.

 

[DVC Doctor]

I don't think anything nefarious is going on. I have kept an eye on the resale market for several years and the past six months has been extremely active for buyers competing and bidding up contracts. I believe there are a few deep pocket individuals buying contracts just to rent out.

 

[crisi]

Exactly- I know it's common with houses, but I hadn't seen it used so explicitly for DVC resales before!

That would be how I would sell - especially if I were selling a contract of less than 100 points. You either sell very quickly - which has its benefits - and it isn't unlikely that you sell very quickly for more money than you'd have gotten with a listing at going rate.

I believe they have to legally present all offers. IMO it's unethical to do so purposefully but I could see it happening on the fly if they got severaly inquiries in a short period. Unless this were something that was difficult to get, I'd rather pay more than deal with a company who operated this way. As I've said before, I think some of the companies actively attempt to control (and with some success) the resale prices including refusing to list for people who actually want to advertise at a price lower they they feel is what it should be.

As it was explained to me - at least in Minnesota - they need to present "all reasonable offers" - an offer for less than you already have an offer for is not reasonable unless it has other features (in a house, a cash offer, or a fast closing, or no inspection - but if I'm selling my house and have an offer for $225k and your offer is $212k and similar in all other respects, my realtor doesn't need to present it - it isn't reasonable I'd take $13k less). I suspect that there is similar language in Florida - or you'd have to present offers from people offering a few hundred dollars for multi million dollar homes.

 

[Dean]

As it was explained to me - at least in Minnesota - they need to present "all reasonable offers" - an offer for less than you already have an offer for is not reasonable unless it has other features (in a house, a cash offer, or a fast closing, or no inspection - but if I'm selling my house and have an offer for $225k and your offer is $212k and similar in all other respects, my realtor doesn't need to present it - it isn't reasonable I'd take $13k less). I suspect that there is similar language in Florida - or you'd have to present offers from people offering a few hundred dollars for multi million dollar homes.

From the FL statues. This wording occurs multiple times one for each classification of a broker.

(e) Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;

 

[Missyrose]

I agree as well, but I was surprised that the broker told me that it had been listed low to attract multiple bids. I realize I left that part out in my initial post.

It's a psychological tactic. They want you to get attached to that specific contract and because that you may be willing to spend more than you would have otherwise. People can sometimes feel like they found the "perfect" contract and will stop at nothing to get it.

 

[crisi]

From the FL statues. This wording occurs multiple times one for each classification of a broker.

Thanks, remind me when I sell my DVC to notify the broker in writing that I don't want to bother with offers below my list price.

 

[pangyal]

It's a psychological tactic. They want you to get attached to that specific contract and because that you may be willing to spend more than you would have otherwise. People can sometimes feel like they found the "perfect" contract and will stop at nothing to get it.

Yes, it's exactly the same as the designer handbag with a start price of $0.99 on eBay, hoping that people bid and become possessive of it as a result!

 

[summabreeze85]

Actually, it wasn't OKW. So it seems that this is more common than I realized.

I was part of the bidding war on that old key west that was loaded and listed for $45.45! Definitely priced to start a bidding war which imo is ridiculous. Okw averages for $70 on the resale market. I got out at $62. Wish I could've talked to the other person bidding and told them I'd give them a years worth of points if they stopped bidding and letme buy it cheap

 

[DenLo]

So does this mean a verbal acceptance is meaningless? Or are sellers not making decisions for days?