Dodging the EBay Mistake

Jordan and I recently had a near miss with Rona's Ebay Mistake: disastrously overpaying in a bidding war. With home prices still falling, it's more dangerous than ever to get sucked into this game. But for the good sense of our buyer broker, we might have.

The low asking price for this lovely house in a reasonably good neighborhood seemed too good to be true. After agonizing over a sleepless night, we decided to go for it. Our broker's research determined that the house really was underpriced, so with no small anxiety we put in an offer at $25,000 above asking -- an amount at the very top end of the reasonable market value. We hoped to knock it out of the park.

The next day, the listing agent told our broker that our high-end offer "wasn't even close" to the successful bid. We felt duped and manipulated. But we were keenly aware that the "winning" bidder likely overpaid by tens of thousands of dollars.

It was a tough initiation to a sales tactic we've spotted again at least twice. But when we see it now, we know that the unbelievably low price is an illusion, designed to lure otherwise sensible people into driving the price artificially high - just like on Ebay.

So instead of getting caught up in a dangerous bidding war, we simply walk away and let someone else make that mistake. In this buyer’s market, there will always be another house.