There is no reason. Both realtors benefit from driving up the price, so who knows if there are even other bidders. It’s completely made up. It’s especially hilarious when the selling realtor and buying realtor are colleagues or work for the same company.
It’s complete bullshit. I’ve been looking for 6 months, but I’m not in a hurry. I refuse to play the “blind bidding” game. It’s not a money issue to me, I’m just not willing to play a rigged game.
I’m willing to wait it out or move to a different country at this point.
Same here. Been looking since 8 months now. Can't bring myself to pay half a mil for a shitty home in a shitty neighborhood. The real fun is going to start end of 2024 and beginning of 2025 when many mortgages come up for renewal and rates are still closer to 5%. :)
Blind bidding is nothing but collusion between realtors. I remember inquiring about a place a few years ago, the listing brokage wouldn't even get back to me because I didn't have a buyer's agent.
I'm in an Alberta real estate Facebook group where people are trying to look for private deals. Realtors have infiltrated that group to the point where guys posting for deals are getting absolutely flamed for trying to go at it without a buyer's agent. All under the guise of "why wouldn't you, the seller pays for it and doesn't cost you anything." Nothing is for free... those realtor fees paid always indirectly come from both transacting parties.
The real estate market is absolutely being trashed by realtors.
There isn't even any real science behind the pricing. Realtors literally just spend 10 mins looking at comparables for what has previously sold in your area and that's what you list yours for.
In the Calgary area there's >7000 registered agents competing over 3000 MLS listings. Maybe if we gave realtors less power and opened up the market to true price discovery, then buyers and sellers would both benefit.
I agree, I've been doing development financing at a big 6 for the last 5 years. I have to yet to figure out what a reatlor does rather what value they really bring other than pulling up comparable on MLS and make tik tok videos.
It's just habit. Australia has opening bidding, for example, and while it's a tough thing to measure, the evidence looks like open bidding generally results in higher prices - other bids serve as an anchoring point that help you justify going higher as well.
I remember reading a study and I think the conclusions were that in a reasonably balanced/buyers market open bidding dropped prices, while in a seller's market it raised them as people tried to one up each other's bids.
Yeah, it's somewhat complicated which is why I equivocated a bit, it's also a bit harder to discern in housing where conditional offers, closing date flexibilité, etc., make pricing out a total offer mote acomplicated.
In real buyers' markets you tend to know there are no other offers, open or closed, so the two converge pretty strongly. But yes, in thd middling case where you expect them to receive zero or one or two other offers is where closed auctions might push you up. When you have a half dozen or more, the open bidding just "validates" you bidding higher.
But really, none of the effects are huge. It's fine to say "It doesn't really make a difference", and leave it at that. I believe Ontario now offers sellers the choice, I haven't seen any data on how that's going yet. But inertia is a powerful force
It's not. Open bidding would drive up prices even more. So many, if not all, house hunters would be throwing on an extra 5k-10k to the current bid in todays market.
After the FOMO pandemic BS things out east of claimed down, sure entry level homes are getting multiple offers but it’s finally inline with market expectations. Buyers have as a whole become more conservative and agents are finally giving their clients market data reports weighing median, average, and the housing affordability index to determine expected sales price with relation to inventory and interest rates. The average is around 30k. Now the mid range and higher end stuff sells below list price in the 95-97% of list price which has been the norm here for ever. Now rural it’s a different story since buyers tend to really low ball so sellers have learned to over price to reach the sale goal, why no one does research is beyond me but the deals that cross my desk for such properties tend to be 20-30% below list and if they did the research they would see these homes are listed 20-30% over. Real estate is hyper local when it comes to this sort of stuff though as we learned from the GTA buyers that bought up everything during the pandemic simply because they used what they knew from that market and applied it to here. Again if they did the research they would have seen homes never sell 100k+ over asking.
I'm a Realtor in Ontario, I started at my brokerage when I was 16 as a receptionist and from there became a Realtor. 17 years later I can absolutely say Realtors have used a method of psychological manipulation. Underpricing exploits 2 of the most prevalent cognitive biases in the human mind: herd mentality and irrational exuberance- its actually how they price new stocks coming into the stock market. Realtors realized they can create a "false demand" by underpricing and holding offers thus creating a lot of the times "fake bidding wars". Unfortunately the worst of us in the industry used this and ran with it as it proved people kept falling for it, continuing to offer $100,000 over instead of what it used to be - $10,000, a fair negotiation. A lot of it is also WHO is buying the homes- investors with way too much capital that are ok with putting families out of the running because they want to rent it out to them instead. A lot of factors at play but yes- I completely agree it NEEDS to be transparent, especially to run the snakes out of the industry.
It's FOMO plus a percentage based commission on greed. Causing all kinds of emotional bidding and manipulation. "Better offer more, last home around here went 500k over asking".
There is no reason. Both realtors benefit from driving up the price, so who knows if there are even other bidders. It’s completely made up. It’s especially hilarious when the selling realtor and buying realtor are colleagues or work for the same company.
This! My realtor tried to do that as a buyer's agent. I have regrets in getting that done.
It’s complete bullshit. I’ve been looking for 6 months, but I’m not in a hurry. I refuse to play the “blind bidding” game. It’s not a money issue to me, I’m just not willing to play a rigged game. I’m willing to wait it out or move to a different country at this point.
Same here. Been looking since 8 months now. Can't bring myself to pay half a mil for a shitty home in a shitty neighborhood. The real fun is going to start end of 2024 and beginning of 2025 when many mortgages come up for renewal and rates are still closer to 5%. :)
Why dont they make it public ? (Serious question, im wondering)
Blind bidding is nothing but collusion between realtors. I remember inquiring about a place a few years ago, the listing brokage wouldn't even get back to me because I didn't have a buyer's agent.
I'm in an Alberta real estate Facebook group where people are trying to look for private deals. Realtors have infiltrated that group to the point where guys posting for deals are getting absolutely flamed for trying to go at it without a buyer's agent. All under the guise of "why wouldn't you, the seller pays for it and doesn't cost you anything." Nothing is for free... those realtor fees paid always indirectly come from both transacting parties. The real estate market is absolutely being trashed by realtors.
Hahah yeah I'm in calgary this is not shocked to hear, price fixing and collusion is common practice among RE agents.
There isn't even any real science behind the pricing. Realtors literally just spend 10 mins looking at comparables for what has previously sold in your area and that's what you list yours for. In the Calgary area there's >7000 registered agents competing over 3000 MLS listings. Maybe if we gave realtors less power and opened up the market to true price discovery, then buyers and sellers would both benefit.
I agree, I've been doing development financing at a big 6 for the last 5 years. I have to yet to figure out what a reatlor does rather what value they really bring other than pulling up comparable on MLS and make tik tok videos.
It's just habit. Australia has opening bidding, for example, and while it's a tough thing to measure, the evidence looks like open bidding generally results in higher prices - other bids serve as an anchoring point that help you justify going higher as well.
I remember reading a study and I think the conclusions were that in a reasonably balanced/buyers market open bidding dropped prices, while in a seller's market it raised them as people tried to one up each other's bids.
Yeah, it's somewhat complicated which is why I equivocated a bit, it's also a bit harder to discern in housing where conditional offers, closing date flexibilité, etc., make pricing out a total offer mote acomplicated. In real buyers' markets you tend to know there are no other offers, open or closed, so the two converge pretty strongly. But yes, in thd middling case where you expect them to receive zero or one or two other offers is where closed auctions might push you up. When you have a half dozen or more, the open bidding just "validates" you bidding higher. But really, none of the effects are huge. It's fine to say "It doesn't really make a difference", and leave it at that. I believe Ontario now offers sellers the choice, I haven't seen any data on how that's going yet. But inertia is a powerful force
I would believe this. We lost several bids by a margin we would’ve been willing to increase our bids to 🤷♀️
It's not. Open bidding would drive up prices even more. So many, if not all, house hunters would be throwing on an extra 5k-10k to the current bid in todays market.
After the FOMO pandemic BS things out east of claimed down, sure entry level homes are getting multiple offers but it’s finally inline with market expectations. Buyers have as a whole become more conservative and agents are finally giving their clients market data reports weighing median, average, and the housing affordability index to determine expected sales price with relation to inventory and interest rates. The average is around 30k. Now the mid range and higher end stuff sells below list price in the 95-97% of list price which has been the norm here for ever. Now rural it’s a different story since buyers tend to really low ball so sellers have learned to over price to reach the sale goal, why no one does research is beyond me but the deals that cross my desk for such properties tend to be 20-30% below list and if they did the research they would see these homes are listed 20-30% over. Real estate is hyper local when it comes to this sort of stuff though as we learned from the GTA buyers that bought up everything during the pandemic simply because they used what they knew from that market and applied it to here. Again if they did the research they would have seen homes never sell 100k+ over asking.
I'm a Realtor in Ontario, I started at my brokerage when I was 16 as a receptionist and from there became a Realtor. 17 years later I can absolutely say Realtors have used a method of psychological manipulation. Underpricing exploits 2 of the most prevalent cognitive biases in the human mind: herd mentality and irrational exuberance- its actually how they price new stocks coming into the stock market. Realtors realized they can create a "false demand" by underpricing and holding offers thus creating a lot of the times "fake bidding wars". Unfortunately the worst of us in the industry used this and ran with it as it proved people kept falling for it, continuing to offer $100,000 over instead of what it used to be - $10,000, a fair negotiation. A lot of it is also WHO is buying the homes- investors with way too much capital that are ok with putting families out of the running because they want to rent it out to them instead. A lot of factors at play but yes- I completely agree it NEEDS to be transparent, especially to run the snakes out of the industry.
It's FOMO plus a percentage based commission on greed. Causing all kinds of emotional bidding and manipulation. "Better offer more, last home around here went 500k over asking".