More and more homebuyers need to be prepared for bidding wars in today’s real estate market. When they arise, people can end up paying much more than the original listing price. Real estate bidding wars are often the result of first-time buyers and investors looking for the best price and coming across a deal that really stands out.
Bidding wars are especially common in real estate markets where there are more homebuyers than places to put them, such as New York City. Demand is high and buyers have to move quickly if they want to land the home of their dreams.
A new report by the real estate brokerage Redfin shows that bidding wars are heating up again in several real estate markets.
Of the 19 markets surveyed in March, Redfin agents reported that nearly 65 percent of offers written faced bidding wars initiated by other buyers. That’s up from about 60 percent in February. But that’s still down year-to-year when bidding wars peaked at almost 75 percent.
San Jose, California was the most competitive real estate market, where nearly 90 percent of Redfin agents said they received multiple bids from buyers. Homes in San Jose sold on average almost 15 percent above their list price.
One Redfin agent says because prices are rising so much this year, she tries to be more discerning in how far she and a client will go to win a home. She says over the last two years, she’s competed with people camping out in their cars or entering lotteries to win a new home.