The Real Deal Miami

Aggressive pricing brings back bidding wars

By Roger Drouin | June 01, 2009 01:44PM

A foreclosure in one of Davie’s pricier gated communities hit the market on a Sunday, and by Monday there were 10 offers. It went to the highest bidder, who offered $75,000 above the $399,000 list price and paid all cash. Since homes in the neighborhood sold recently for $600,000-plus, the winning bidder didn’t mind that the home needed a new roof.

“The people making bids saw the value in the area,” said Dorothy Alfano, a realtor with Coldwell Banker in Miami Lakes. “It was kind of like a silent auction.”

Another bank-owned single-family home in Pembroke Pines drew three offers last week equal to or topping the asking price of $165,000. The home is one of the less than 10 percent of South Florida foreclosures in move-in-ready condition.

Conditions and price brackets don’t factor into the bidding wars that have returned to South Florida, as buyers try to grab perceived bargains in a market where property values are down across the board. Thanks to aggressive pricing, first-time buyers and investors are scrambling back into the market, often competing on deals.

“The problem has been pricing,” said Alfano. “Sellers, and even the banks, wanted to get 2005 prices. Now banks are pricing right. Sellers who want to sell are pricing right. And people know when pricing is below the market. So they’ll come to that property, and they want to know what it takes to buy that property.”

Homes and condos under $250,000 that are in good condition are moving the fastest, realtors in Miami-Dade, Palm Beach and Broward counties say. Alfano has one buyer seeking a single-family home in the $200,000-and-under range who’s already lost three bidding wars.

“Originally she was looking in the $220,000 price range, but she couldn’t get financing, and had to drop her price range,” Alfano said.

Investors are also picking up foreclosures that require repair work, fixing the home up and either selling it to first-time homebuyers or renting it out.

“If the listing is priced right, three or four offers will come in right away,” said Bob Sauer, a broker with Coldwell Banker in Delray Beach who handles mostly single-family listings in Palm Beach County. “And they’ll fight over it.”

Aggressive pricing can yield higher sales prices in this climate than a home listed at market value, Sauer said. “The multiple offers bring up the price,” he said.

Marci Trautenberg, a realtor with EWM Real Estate in Miami, has seen enough recent bidding battles that she’s now advising buyers to make offers quickly. She has contracts filled out — down to the name of a condo tower on Miami Beach that a buyer has been eyeing — so when a unit becomes available, the buyer can be one of the first ones to make an offer. “We just fill in the unit number, and we’re ready to go,” Trautenberg said.

As both foreign and domestic investors and locals seeking second homes snatch up below-market condos, new listings are moving faster. In April, condos stayed on the market an average of 108 days — down 41 percent from 15 months earlier.