Open Bidding vs. Blind Bidding

Sep 8, 2022 • FINAL OFFER

Bidding wars: we’re all familiar with the concept, and for those who have purchased a home over the last few years, you’ve likely been a frustrated participant.

These circumstances exist when a home is being sold through a blind bidding process. Blind bidding is when a buyer does not know the price and terms that the seller will accept, nor do they have any information about competing offers. Although standard for the industry, this process creates uncertainty and room for prejudices, biases, and potentially unfair practices to occur when managing how offers are presented, negotiated, and accepted by the seller and their agent. 

But there is an alternative that is used in other places around the world, and it is gaining traction in the United States – open bidding. At Final Offer, open bidding features complete transparency of the listing and offer process. The seller states the price and terms that they would sell their home for, giving buyers the certainty they need to make the winning offer. In addition, all buyers are alerted at the same time, in real-time when another offer is made, prompting them to act.

There are different processes for open bidding, some resembling auction formats in which offers can be made on a set date and time driving a short, competitive event. Others allow offers to come in over a period of time and may have a deadline on when the seller accepts an offer. No matter the specifics, open bidding can benefit everyone involved: 

  • Sellers have the opportunity to achieve true market value by providing a transparent, competitive platform that drives urgency from the buying community. 
  • Buyers know exactly what it takes to make an offer that will be accepted by becoming aware of where they stand in the process. This transparency allows buyers to compete fairly and react immediately as opposed to waiting and hoping that their offer has been accepted.
  • Agents can provide their sellers with a competitive platform that drives urgency and provides their buyers with certainty by giving them the information and resources needed to win a home.

Open bidding is currently being adopted with technology platforms like Final Offer that solve for comparing one offer to another, where both price and terms are considered. This not only ensures a more transparent and less stressful process, but also guarantees that the home will be sold based on its true market value, driven by supply, demand and the local market. 

To find out more about the advantages of open bidding or to list your client's next home on Final Offer, schedule a demo today.