Recommended? Bidding procedure for sellers!
Is a "bidding process" recommended for sellers? What is standard in the USA is rarely practiced in Germany. Some properties are offered in the so-called "bidding process" in the real estate market. The pros and cons of this strategy for the seller will be briefly explained below.
What does "bidding procedure" mean?
This is a sales strategy that seeks to achieve the highest price for a property. Unlike an auction where the highest bidder automatically wins the bid, it is up to the seller whether he actually sells to the highest bidder or the bidding process can be stopped by the seller at any time. A bidding process can be initiated with a fixed starting price, which is usually settled slightly below the estimated selling price or without a price. The latter procedure is often used when the demand, due to the condition and location of the property, can not be accurately estimated.
As a rule, both procedures lead to so-called "mass inspections" - as this can hardly be done organizationally by a broker due to the high number of interested parties. In the best case scenario, this can have the advantage that the property is already sold after an appointment, ie the seller may save time. However, collective appointments also have disadvantages. Often there is not enough time to answer individual questions from interested parties, discretion is not respected and some interested parties may "run away", ie they submit an offer that is ultimately not financed by their bank. And, what should not be forgotten: the purchase of a house or an apartment has a high psychological and emotional value for many buyers. A large part of this clientele will therefore refrain from mass viewing in advance, as they feel put off by a bidding contest.