Bidding Wars Seen More Frequently

Bidding Wars Seen More Frequently Bidding wars are back – at least in some parts of the country where falling prices are pitting investors against homebuyers looking for a good deal.

The parts of the country most likely to see warring bids are parts of California and Arizona, Washington D.C., and Minneapolis-St. Paul, according to real estate practitioners and other observers.

Having cash in hand can be persuasive in a bidding situation. Sellers are inclined to choose offers that aren’t likely to fall through, says Frank Borges Borges LLosa, owner of FranklyRealty.com, a real-estate brokerage in Arlington, Va.Connie Vaughn, an associate with ZipRealty in the Los Angeles area, says one of her clients won the bidding when he offered $20,000 above the $66,000 asking price for a four-bedroom home in Adelanto, Calif., that sold for $200,000 in 2004.Vaughn says she believes that mortgage companies are deliberately setting prices low on REO homes just to stimulate bidding situations.

Source: The Wall Street Journal, James R. Hagerty (04/23/2009)