[blackskad]

No, it just reverses the dynamics: instead of starting out low to get people into the door, you start with a list price that's too high. If the bids you're getting are always far below your asking price, you know the free market isn't willing to cough up what you want, and you lower the price to something that is more in range. If your initial asking price is $1MM and all bids are around $800K, consider dropping the list price to $850k and see if they want to play now.

That's the usual dynamic in Belgium.

[loeg]

So why is this better, exactly? Seems like it just takes longer to accomplish the same goal (finding FMV). Buyers are still not guaranteed their offer will be accepted unless they gratuitously overpay (by offering list price).

[blackskad]

You're assuming all the sellers are always overpricing by a very large percentage and that nobody accepts a lower offer.

What usually happens though, is that you determine an estimated FMV (eFMV) based on recently sold properties in the neighborhood that are similar in size. Experienced realtors are usually quite good at this. You can add a factor to the eFMV to get your list price. As a seller, in the worst case, you may have to drop your list price to your eFMV. Best case, you get a nice bonus. When there are multiple bidders around your eFMV, but under listing, you have some leverage to get a higher bid. Let's assume your eFMV is 850K. "Look, I have a bid of 850k. You're at 825k. My list price is 900K, but if you bid 875k now, it's yours guaranteed." It looks like a steal in the buyers eyes ("25k below list price!") and you get a nice 25k bonus over the eFMV.

As a buyer, this silent "list price is always accepted" rule, gives you the ability to properly filter properties because the list price functions as a cap. This saves both buyer and seller time because you're not chasing unreachable properties. You can also get a realtor to get your own estimated FMV for the property that looks interesting. It's up to you to decide if the certainty of the buy is worth the difference between list price and your eFMV. If not, you can always bid something lower, closer to your eFMV but with the possibility that someone outbids you.

The process usually is really fast, because realtors are good at estimating a FMV, most sellers realize they shouldn't expect a huge premium over that estimate and buyers accept a premium for the certainty of an immediate sale.

[loeg]

I'm not assuming nobody accepts a lower offer. Just that sellers will overpice FMV by some margin (as you confirm) and eventually accept the highest bid under list (seems confirmed too).

[Splines]

And I think this system makes more sense - pricing is more transparent and saves everybody a bunch of time.