Ask Ray About Real Estate: When bidding wars backfire

In April, the median price of a house in Seattle hit a new high of $700,000, according to data from the Northwest Multiple Listing Service. That’s double the median price from just five years ago. Seattle continues to be the number one city for home price growth.  According to the recently released Case-Shiller home price index, single family home prices in the Seattle metro area increased almost 13 percent over one year ago –the fastest growth in more than three years.

Seattle also holds the number one spot for lowest percentage of available housing stock in the nation, according to   There are 25 percent fewer homes on the market than a year ago. At the end of April, MLS brokers reported 10,679 homes and condos for sale across a 23-county area, which compares to the year-ago selection of 14,235 listings, according to statistics from Northwest Multiple Listing Service.

With a record-low inventory of housing, bidding wars have become the new normal.  In the last two months, 90 percent of written offers faced competition, according to the Seattle Times.  Seattle had the highest rate of bidding-wars of any city tracked.  Great news if you’re a seller, right?  Maybe not. Sometimes, in a bidding war, the seller becomes the casualty.

First, if you’re planning to sell your home, start by hiring the most experienced Realtor you can find.  Look for an agent who has been through several economic recessions, and understands how to sell a home in both good and bad economic conditions.

Second, if an agent recommends a bidding war as the best strategy for your selling your home, you may want to continue interviewing other agents.  Bidding wars happen, that’s a fact.  But, engineering a bidding war with an artificially reduced listing price is a terrible strategy.  In general, making a bidding-war the goal is not a wise business plan.  Instead, challenge agents to present you with other strategies for selling your home.

Third, sellers need to recognize that bidding wars are wildly unpopular with buyers.  There is no need to push buyers into making offers; they will make them.  Buyers recognize when a listing agent is trying to manipulate them, and that will discourage some buyers from submitting an offer on your home.  A well-qualified buyer, with an approved mortgage, may avoid your home on the assumption they cannot compete with a cash buyer in a bidding-war scenario. From personal experience, some buyers won’t even bother to come and take a look at your home if your listing spells out that offers will be delayed to a specific date and time.  The foremost goal of your listing agent should be to attract as many buyers as possible to your home, not discourage buyers.

Fourth, the highest offer is not always the best offer.  Don’t be dazzled by dollar signs.  Sure, price is important, but there are a lot of moving parts to any offer: Contingencies, mortgage terms, the earnest money, the closing date, the appraisal, inspections, and more.  The terms of each offer must be evaluated on their own merit.  Here is where your agent earns their commission, by helping you to identify the best offer.

Finally, recognize that bidding wars frequently fail.  I was called in to help salvage the situation when a bidding war involving three buyers imploded, and all three buyers exited the negotiations.  Managing a bidding war isn’t for amateurs.

If you are among the 90 percent of Seattle home sellers that receive multiple offers on your home, here’s the most valuable piece of advice I can give you: Know when to end the bidding.  Instead of encouraging a bidding war, invite all buyers to present their highest and best final offer.  This strategy often results in a higher price than a bidding war, and with less drama and risk of failure.

RAY AKERS is a licensed Realtor for Akers & Cargill Properties in Seattle. Send your questions to or call 206-722-4444