NAR Bid Disclosure Rule In Action
A: I wrote a post titled, "Bids Submitted No Longer Confidential", back in April after I discovered that the NAR voted that Buyer's Agents must disclose to their clients that the bids that they will submit on any particular property MAY NOT be kept confidential! Check out this ad I found in the NY Times this weekend that shows the results of this allowance by the NAR in the real world.
My feelings are mostly AGAINST this practice as I believe that a buyers bid should be kept confidential betweem the BUYER, the SELLER, and the BROKERS involved in the possible transaction. When the NAR voted to allow brokers to 'shop around' offers, they opened the door for potential complications while at the same time giving the seller a false sense of hope that they can get a bid higher than one submitted. I can just imagine the look on a brokers face when their client informs them that they would like to ADVERTISE THE BID they just received; what ever happened to being happy with a strong bid and accepting it?
It's a different market right now than a year ago; a market where bidding wars are a rarity and NOT the norm. In today's market, 'PRICE REDUCED' & 'MUST SELL' are the magic words in print advertising. When I see the ad above I can't help but feel that the buyer who submitted a strong bid of $2.799M or so is getting screwd and that if it were me, I would withdraw the bid and move on. What possible good can come from this if you are one of the buyers who submitted the bid? In the end I think the seller is pulling a very risky move unless they actually received 2-3 strong offers and can afford if 1 drops out.
When I look at the ad I see a 1,875 square foot 3BR that is asking aproximately $1,500 a square foot; very pricey for a new development that faces north on 79th street and can't possibly have that great of views or natural sunlight. But hey, thats just me and I have to come to terms with the fact that 'the market will pay what the market thinks a property is worth'.
In any event, for any buyers out there who are interested in getting into a bidding war for a very expensive new development, there is an Open House Monday from 5-7PM for this property! Good Luck and be sure to buy puts in the new housing futures to hedge against this investment!
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