The Art of the Bidding War

That’s right. There is an art to creating a real estate bidding war. First, the ingredients have to be just right: low inventory, high demand, a desirable property, incredible imagery/photography, a video, professionally written description, social media buzz (is nice, but not 100 percent necessary) and … a suggestive (even seductive) price. If those ingredients are just right, and several buyers are interested in the home, then the seller and their agent could be in the midst of a multiple-bid situation.

Now bidding wars aren’t unheard of in places like Miami, Austin or even 20 minutes away in Westchester — or pretty much anywhere across the country over the past two years. (Although, I am hearing about pockets of cooling in some places in the U.S.) But in New York City, just before the COVID crisis hit, real estate was in the midst of its fourth year of a declining (buyer’s) market, and multiple-bid scenarios were very few and far between. Today, the bidding war is a new and welcoming sight to many sellers and seller’s agents.

Even this broker has been on both ends of a multiple-bid situation. Recently, a buyer of mine just about won his third try at getting an apartment in New York City and had to beat out stiff competition and wager $205,000 over asking to be chosen. Even then, it took heavy lobbying (begging) from my team and me for our buyer to win out. Meanwhile, in Brooklyn’s Park Slope, where the competition is fierce for townhouses, a buyer of mine, unfortunately, lost his second bid for a house even though he offered $255,000 over the asking price. He came in third.

So, are bidding wars back? If those aforementioned ingredients are juuuust right, the market is suggesting YES! Yes, the seller can achieve a multiple-bid scenario if those conditions are perfect. But if just one ingredient is off, you will sour the bidding war soup. But because of the low inventory supply in Manhattan (roughly 5,000 listings as of Feb. 25) and in Brooklyn (about 2,400 listings) and because of the high demand from buyers over the past 18 months, the conditions for multiple bids are definitely back. Well, at least for a select number of properties. I’d say roughly 20 to 25 percent of the marketplace (and growing) has just the right ingredients for a bidding war.

All of this is an indication of where this New York City market is going — into the hands of the sellers.