If I were a real estate agent, I would never encourage my clients to participate in a bidding debate. Winning such a debate often leads to what is called the “winner's curse"."This term means paying a higher price than everyone was willing to pay in the bidding debate, which puts your finances at greater risk if the real estate market suffers a downturn.
Personally, I avoid bidding debates because I know that my feelings can cloud my judgment. It's similar to my approach to Poker - I refrain from drinking a lot to keep a clear mind to make rational decisions. And for those who are looking for love, take off the beverage glasses!
This article looks at the reasons why people get into real estate bidding debates. I want to understand why potential homeowners do not heed my advice to look for houses during the slow winter months. It baffles me why more potential homeowners wouldn't choose to undermine a poorly marketed, poorly rated, or stagnant listing rather than a perfectly presented one.
I'm trying to figure it out because maybe I have a blind spot that needs to be fixed. Let me share a few examples of bidding action, followed by comments from a real estate agent and three home buyers on why they engaged in a bidding debate.
Examples of real estate bidding action in San Francisco
1615 Funston Avenue (Inland Sunset/border with Golden Gate Heights) - 2 beds, 1.5 baths, 1,230 square feet, $1,495,000, sold for $1,675,000 or $180,000 more than the price (12%). Although it is a small house, it is beautifully renovated inside and out. Paying less than $2 million for a renovated family home in San Francisco is what many families want.
220 Magellan Avenue (Forest Hill) - 3 bedrooms, 2.5 bathrooms, 2,455 square feet, $2,795,000, sold for $3,125,000 or $330,000 more than the price (11.8%). Cute house on a tree lined block in the best neighborhood on the west side of San Francisco. The price between $2 and $3.5 million is common for dual-income, middle-income households with children.
Several really massive outbiddings
120 Lenox Way (west portal) - 4 beds, 2.5 bathrooms, 2,221 m2, $1.795 million, sold for $2.56 million, which is $ 765,000 more than the price (42.6%). The house has received 15 offers and is located in front of a playground and a school. Depending on the individual, this can be a good or a bad thing. The house is only one block from the MUNI train station and two blocks from shops and restaurants.
150 Santa Paula Avenue (St. Francis Wood) - 5 beds, 3 bathrooms, 3,585 square feet, $4,795,000, sold for $5,705,000 or $910,000 more than the price (19%). The seller received a pre-emption offer only a week after registration, so there was no bidding action.
The house is located on a large plot of 8,659 square feet, which is extremely rare in San Francisco. For a family with children and dogs, this enclosed courtyard is special.
Personally, I avoid bidding debates because I know that my feelings can cloud my judgment. It's similar to my approach to Poker - I refrain from drinking a lot to keep a clear mind to make rational decisions. And for those who are looking for love, take off the beverage glasses!
This article looks at the reasons why people get into real estate bidding debates. I want to understand why potential homeowners do not heed my advice to look for houses during the slow winter months. It baffles me why more potential homeowners wouldn't choose to undermine a poorly marketed, poorly rated, or stagnant listing rather than a perfectly presented one.
I'm trying to figure it out because maybe I have a blind spot that needs to be fixed. Let me share a few examples of bidding action, followed by comments from a real estate agent and three home buyers on why they engaged in a bidding debate.
Examples of real estate bidding action in San Francisco
1615 Funston Avenue (Inland Sunset/border with Golden Gate Heights) - 2 beds, 1.5 baths, 1,230 square feet, $1,495,000, sold for $1,675,000 or $180,000 more than the price (12%). Although it is a small house, it is beautifully renovated inside and out. Paying less than $2 million for a renovated family home in San Francisco is what many families want.
220 Magellan Avenue (Forest Hill) - 3 bedrooms, 2.5 bathrooms, 2,455 square feet, $2,795,000, sold for $3,125,000 or $330,000 more than the price (11.8%). Cute house on a tree lined block in the best neighborhood on the west side of San Francisco. The price between $2 and $3.5 million is common for dual-income, middle-income households with children.
Several really massive outbiddings
120 Lenox Way (west portal) - 4 beds, 2.5 bathrooms, 2,221 m2, $1.795 million, sold for $2.56 million, which is $ 765,000 more than the price (42.6%). The house has received 15 offers and is located in front of a playground and a school. Depending on the individual, this can be a good or a bad thing. The house is only one block from the MUNI train station and two blocks from shops and restaurants.
150 Santa Paula Avenue (St. Francis Wood) - 5 beds, 3 bathrooms, 3,585 square feet, $4,795,000, sold for $5,705,000 or $910,000 more than the price (19%). The seller received a pre-emption offer only a week after registration, so there was no bidding action.
The house is located on a large plot of 8,659 square feet, which is extremely rare in San Francisco. For a family with children and dogs, this enclosed courtyard is special. 
