Auctions aren’t common but using a hold-back offer strategy is and this is the strategy many Toronto realtors (as well as realtors in other popular urban cities) use to push up the price. In an auction, the potential buyer needs to register. Hold-back strategies also require potential buyers to register (through their realtor and, typically, by formally submitting a purchase offer). Just like an auction, the hold-back strategy requires days or weeks of promoting the property (through pictures and open houses) in order to drum up interest and hopefully demand. And just like auctions, hold-back strategies typically turn into real estate bidding wars, which push up prices. The only real difference is that an auction is a more formalized hold-back strategy/bidding war.
Real Estate Auction, on the other hand, is a more transparent process. It is very popular in Australia. In some area of Australia, it is almost impossible to purchase real estate without attending real estate auction. In average, real estate sales via auction count for between 30-35% of all real estate transactions. Real estate auctions are also getting more and more popular in US. Real Estate Auction is a completely transparent process, since each bidder can see all the other bidders' price. Real Estate Auctions can be live, online, or a hybrid. Online real estate auctions are also very efficient. Bidwin.org is the first online real estate auction website & auction platfrom in Canada.
Aggressive bidding wars are considered to be signs of a hot home market. In cities like Toronto and Vancouver, these wars have been going on for many years now. While most people may think that buyers are actually falling over one another to purchase these homes during a desperate shortage, the reverse is actually the truth. In recent research studies, these tactics are being used as fictional high pressure tactics to control the prices of housing.
Based on studies performed by Lu Han and William Strange, these wars still went on even when the housing bubble occurred in Washington DC In specific during 2010, when the housing market in Washington hit rock bottom, approximately 30 percent of the homes were purchased using this fake Real Estate Auction strategy.
Unfortunately, starting these wars are relatively simple to start since all the seller has to do is list their homes at toolowhttp?//www.bidwin.or/about a price. To keep these deceptive practices going, some realtors in Toronto are now advising their clients to sell their homes below market value so that they can start a bidding war. However, It is also important to note that the home buyers are beginning to become suspicious of these fake activities.