Many people are reporting how it can be nothing short of an absolute frenzy of activity when a house is put for sale on the local real estate market. It’s true that often times a home is sold before any more than a handful of people have even become aware of it being on the market, and that can be especially true in regions of the country that are desirable for people and places where owning a home isn’t a simple proposition by any means.
While there’s a host of factors that go into that, the basic reality here is that demand continues to far outstrip supply and then there’s the role of record-low interest rates that make it easier than ever for would-be homebuyers to be mortgaged into being able to buy a home. That’s not always the best long-term idea for a lot of people, but it’s their decision to make and if the bank is willing to finance them, the bank is willing to finance them.
Realtors who are newer to the game may have more difficulty prospecting new clients in comparison to other more established agents. Nothing beats tested and true hustle for countering that, but our online real estate lead generation system here at Real Estate Leads is a good way to level that playing field somewhat. One thing’s for sure – the real estate business is never going to be an any less competitive one.
But back to topic, and one of the things that’s become more of a pronounced trend during all of this frenzy across Canada is the phenomenon of ‘blind bidding.’ That can be figured out fairly easily to mean bidding on a property ‘blind’, but what’s really to all of that?
Let’s have a look at this week.
No Views, No Problem
A blind real estate offer is a purchase contract written by a buyer who has no problem with the fact they’ve never actually seen the property. Up until recently this was at leas somewhat common for commercial properties, but it was never something you’d consider for somewhere where you’d be planning to leave at least.
That is, until 2020 and the Coronavirus pandemic it seems.
So part of the reason people are making blind bids on homes is because they’re reacting to the frenzy and don’t want to miss out any of the few properties that make the grade for them on paper. But the pandemic and its restrictions are playing a part in this too, and specifically with the way that open houses aren’t possible the way they used to be and showings of homes have to be on a 1-viewer at a time basis.
This puts would-be buyers at an obvious disadvantage, unless of course they have some means of ensuring they’re always one of the first to view and evaluate whether they want to bid on a home. This extends to inspections, approvals, and the like too. When you add all the delays up, many buyers have experienced how a home they were planning to make an offer on is already long since sold.
And so we are with the blind-bidding trend picking up steam. Is it a massive leap of faith to bid on a home you’ve never laid eyes on or set foot in? You’re darn right it is, but obviously some clients feel that’s what is called for nowadays.
After all, if it’s entirely not what you expected it’s entirely true that you can probably sell it yourself right away yourself (aware of the fact most Provinces have $ penalties attached to ‘flipping’ this way.
So while blind bidding is a product of the times, it is a way for homeowners to actually get bids in before a home is sold in a staggeringly short amount of time and leaving these buyers back at square one with finding a home for themselves.
Enough to Confidently Make a Move?
The reality is that blind bid real estate offers are dangerous. They impede the buyer’s ability to have properly overseen the property, and as we all know there’s plenty of technology and ability out there to make a home look a lot better on a screen than it does in person. There’s risks for the seller too, as they may get tied up with a buyer who may or may not be willing to go through with the sale once the home is finally seen in person.
There’s no way around this handicap if you are truly bidding blind and trusting that the home you’re aiming to buy is legitimately represented in the images you’ve seen of it. Most realtors will tell you it’s never a good idea, but they’ll also tell you that in today’s market in certain areas of the country it may be what you need to do once you become aware a home that meets your criteria goes onto the market.
The old saying ‘he who delays is lost’ is very true much of the time here, and that’s not a good thing considering you should always be evaluating major life purchases – but it is what it is!
Is it less risky making blind bids on lesser-priced properties? Of course it is, but ask yourself this – if it’s a lower-priced property then is it going to be the type of home that’s going to be fiercely bid on and selling withing hours of being listed on the market?
It may be, but probably not. Most of the blind bid home buying that’s going on in Canada these days is in major metro areas where the home is far from inexpensive but there are not shortage of buyers who are ready to pay asking price, if not much more than asking price. If you are going to make blind bids, have a solid idea of what your bidding threshold is and overrule any urge to go past that point.
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