A friend of mine just lost a bid on a house after going $15K above asking. It's weird, most people are low-balling sellers, but that is probably due to their homes being overpriced. I would have to guess that if you have a nice home that shows well and is priced appropriately, you will get a lot of action which leads to bidding wars.

The devil is in the details and thus inquiring minds want to know:

1) Was the house under priced to begin with? ($15 vs $329 is a still modest 4.5%)

2) Was the war based on something about the structure itself? (A townhouse? Get real)

3) Was the war based on something about the specific location? (IMMEDIATE convenience to someones work for example that would allow eliminating $6000 a year in auto expense)

4) Was the war based on something about the neighborhood? A particular school district in the best school system in the state.

There are other variables that could also apply and sometimes a cigar is just a cigar. (In other words, don't see anomalies as more than anomalies)

As everyone probably knows at this point, the right price makes a difference, so that (aside from external factors like credits and interest rates) is most likely the key here. Hanah says the particular neighborhood is popular with young families, so No. 4 is coming into play, too.

The tax credit has a lot to do with it. In addition, so do the number of distressed properties on the market in poor condition. There are so many properties that need so much work, that when a property pops up at a decent price and in great condition (even the occasional short sale/foreclosure), it is a frenzy! I have written several offers over the past couple of weeks with clients and they have all been competing offers.

I have put in a bid on two houses and both of them we lost.

The first one was at list asking for 4% for closing and someone came $3K above us with no subsidy.

The second one, we were $2K above list with no contingencies and someone came in at list with an all cash offer.

I still believe we are in housing slump, but for houses priced well, a seller can generate multiple bids.

All this shows is that buyers determine the sales price, not sellers.

From what my friend has been researching the house was priced right around where it should be for the area. The house was $305K and they were in competition with another couple. They figured $15k over was all they wanted to spend for the house and they thought that was all it was worth. They aren't too upset because there are plenty of houses out there that fit there needs and they are not going to rush.

There wasn't anything too specific to cause multiple bids. Not every place getting multiple bids has to have something special like location and schools. It was a nice neighborhood with a nice house that was priced appropriately and two couples thought it was good enough to put an offer in on. I think well priced homes in nice areas are probably getting some action. People that can afford to list their homes below everyone elses are in a great position. There homes are less than most others, they can still make a profit, and they are not a foreclosure, which people have been having issues with.

There are so many homes on the market, that if one gets away, there will always be another. The key is to be patient and don't think that particular house is the only one worth buying. There will be over 3 million more foreclosures in 2010, higher than '09 so don't worry. Prices will keep falling and more homes will be available. The shadow inventory will be coming in the spring. Rates will be going up in the spring/summer and the tax credit will expire. If you can wait a little longer, you will get an even better deal when prices continue to fall. Now, FHA requires 3.5% down payment and they cut seller concessions from 6% to 3%. Prices will have to go down based on that alone. Don't let the tax credit be the motivating factor in buying. Once the stimulus in housing is taken away, you will see another free fall. The housing recovery won't begin for another couple years when the Pay Option ARM's and Alt A Interest Only ARM's make their way through the market. The sub prime loans total came to about $1 trillion. The next wave will be even more severe with loan volume totaling $1.5 trillion.

We lost out on a bunch of houses (four, I think?) late last year because we were unwilling to play bidding wars with people. Frank is right-- there are a zillion houses out there and while it's easy to get caught up in THE ONE, chances are there are others that are just as good.

We finally got a house we loved at a price that was great. If the market goes down or up-- doesn't matter, we'll be here a while. We were satisfied with our price.

I agree with Frank Rizzo. There really is no reason in this market to pay above list price. Being impatient and getting caught up in a bidding war is the cause of this. There will be a fresh inventory of houses in the spring, there are more foreclosures to come and once the credit is gone buying will slow down even more. With just these factors alone this will drive housing prices lower. So in the end you will make out much better than the tax credit will provide and you didn't have to try and beat the deadline. This is an anomalies created by people who aren't educated about the market enough to know that it's not worth it. On the other hand, value is in the hand of the beholder.

Ellicott City is a "hot" place and $329K is a good price for the area (considering that it "shows well"), so - duh! Any well priced property in solid move-in condition near a good school is selling like hot cakes right now.

On my way from work I drive through a nice older neighborhood with walkways and tall trees. Just a couple of weeks ago I've noticed there was a house for sale. I made a mental note to look it up but forgot and what do you think - it's already sold just a few days later.

It is funny how the market works sometimes. While we are absolutely still experiencing a housing slump there are pockets where bidding wars still occur. It's the same old story, location, location, location! We see it alot with REO sales where it is not uncommon, especially now as things are starting to improve some, where a bank will receive lots of offers at or even above the list price. On top of that the offer may indicate that the entire commission will go to the listing agent to encourage them to tell the bank that this the best offer.

As with anything in life there is usually more than one that can make you happy. There are so many homes on the market, that if one gets away, there will always be another and probably another as well. Thus, don't be too hung up on getting one particular house if you are really motivated to get the great deal. The key is to be patient and don't think that particular house is the only one worth buying. There will be over 3 million more foreclosures in 2010, higher than '09 so don't worry. Prices will keep falling and more homes will be available. The shadow inventory will be coming in the spring. Rates will be going up in the spring/summer and the tax credit will expire. If you can wait a little longer, you will get an even better deal when prices continue to fall. Now, FHA requires 3.5% down payment and they cut seller concessions from 6% to 3%. Prices will have to go down based on that alone. Don't let the tax credit be the motivating factor in buying. Once the stimulus in housing is taken away, you will see another free fall. The housing recovery won't begin for another couple years when the Pay Option ARM's and Alt A Interest Only ARM's make their way through the market. The sub prime loans total came to about $1 trillion. The next wave will be even more severe with loan volume totaling $1.5 trillion. So be very careful, choose wisely and plan to be in this for the long haul