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Real: 5 tips to start a bidding war for your home

While it's a far cry from the heady days of the real estate bubble, the revival of home bidding wars in some parts of the country spells opportunity for sellers. 

"The housing market has been skipping along the bottom since 2007," said Doug Breaker, president and CEO of in Chicago. "There's pent-up demand now as people are finally realizing prices won't go too much lower." 

With more buyers in the market, sellers have greater control over the sales price and may see multiple offers. 

There is one caveat: "To get a bidding war, you have to have a good location," said Brendon DeSimone, a real estate expert in San Francisco. "If you are in front of a bus stop ... it's not going to happen." 

If you live in an area that's in demand, there are ways to create a buyer frenzy. Here are five strategies: 

Price it to sell. If you overprice your home, you won't draw much buyer interest, and the house will languish on the market. 

You must analyze the comparables and then price the home slightly below what it's worth, according to Michael Corbett, author of "Ready, Set, SOLD!" "You don't want to go much lower than what the house is really worth because when you underprice, people will think something is wrong and start lowballing you." 

Corbett recommends using comparables no more than 60 days old and including comps for homes sold in foreclosures and short sales. 

Setting a low asking price is more likely to spark a bidding war where the local housing market is hot, Breaker says. In a soft market, setting a low asking price might result in a quick sale but at a disappointing price. 

Host a broker open house. The more real estate agents who know your house is on the market, the more potential offers you can draw. "A lot of times, brokers have a buyer in mind and see your property and think, 'Oh wow, this property is perfect for this buyer,'" Breaker said. "Hosting a broker open (house) gets the word out among brokers." 

Hosting a broker open house is your agent's job. Your agent will know all the local players and how to lure them to the showing. "You want to get as many Realtors through the house in the first week as possible," Corbett says. 

Create a website for your home. Leverage the Internet and social networks to create buzz about your house. Post pictures of the house and share the link on Facebook, Twitter, LinkedIn and anywhere else potential buyers may hang out. 

"Now, 80 percent of all homebuyers first preview houses online. The more elaborate the online presence, the better," Corbett said. 

The website should contain a lot of pictures and a diagram of the floor plan. 

Stack the open house. When a house gets multiple offers, they typically arrive shortly after the house is put on the market. To maximize exposure, have an open house for potential buyers shortly after the home is listed. If you have an open house full of potential buyers, there's a chance for a bidding war because buyers don't like feeling they are missing out, DeSimone says. 

To stack an open house, have your real estate agent schedule showings back to back, so potential buyers will bump into each other. 

Stage the house. Make sure it's free of clutter, scrubbed of pictures and personal items, and with neutral decor. "It has to look like it's out of the Pottery Barn magazine," DeSimone said. 

Corbett says the biggest mistake a homeowner can make is not getting rid of the clutter. Equally important is making sure the house has curb appeal. "You want the home to read like a five-star hotel," he said. 

Mortgage rates edged higher this week after the latest jobs report injected some confidence in the market. 

The 30-year fixed-rate mortgage rose 7 basis points to 3.59 percent. A basis point is one-hundredth of 1 percentage point. 

The 15-year fixed-rate mortgage rose 4 basis points to 2.88 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, rose 3 basis points to 4.19 percent. 

The 5/1 adjustable-rate mortgage rose 1 basis point to 2.68 percent. With a 5/1 ARM the rate is fixed for five years and adjusted annually thereafter. 

The volume of mortgage applications decreased 1.2 percent last week compared to one week earlier, according to the Mortgage Bankers Association.


Copyright 2012 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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