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Home Buying

Breaking Down Lance Bass's Brady Bunch House Heartbreak

This tweet from Lance Bass was raw and filled with the emotion of a disappointed buyer.  I think there are some key points worth reinforcing. Here is a breakdown of the tweet:

we placed the winning bid, at least that's what we were told â†’ listing agent shouldn't have told anyone that they have "the" winning bid. Feedback regarding a bid being currently the highest on the table is one thing, saying they have "the" winning bid is a recipe for broken hearts.

which was WAY over the asking price â†’ buyer's mentality will continue to be anchored by the asking price. The asking price is of a smaller relevance than most people think it is, but they equate the bid over asking to guaranteed win.

after the final deadline for offers â†’ deadline for offers is a silly concept. A seller discouraging more offers is backwards to their own interest. People are usually trying to achieve some sort of incentive for buyers to place their bids and create a sense of urgency, but it's a bad solution because it isn't real. If a seller receives a great offer "after" the supposed deadline, of course they will take it.

we were prepared to go higher but were discouraged by the seller's agent â†’ bad agent, did not act in the seller's best interest. Discouraging buyers from submitting offers is contrary to the seller's best interest (to sell for a higher amount), especially offers that will motivate other buyers to go even higher. The reason why the agent discouraged the buyer from submitting another offer is shame. They knew they had messed up by creating the false sensation that the offer had absolutely won, and now were feeling guilty about coming back and telling them to increase their offer, while also knowing that there was a high chance the buyer would just suffer more pain since they were likely to be outbid. 

they will outperform any bid with unlimited resources â†’ that statement can be made in terms of "high probability" but not "certainty". People's true actions are what matter, not what they say they would do. If they were going to outperform any bid, then they should be tested. Let the bid come in, let them see if they will really outbid it.

how is this fair or legal? â†’ everyone has the right to value something and to pay how much they want for it. When a buyer is discouraged or just completely "removed" from bidding by not being given a chance, that's what makes it unfair. How to please sellers? Sell for the highest price. How to please buyers given only one can have the asset at the end of the day? All buyers should be given equal `chance` to compete, and the `buyer who values the home the most` should be the one that gets to keep it. You can't make all of them have the home at once, but you can make sure they are all able to compete and choose to pay or not to pay on their own, instead of the choice being made for them.

how can I compete with a billion dollar corporate entity? â†’ the purchase power of various participants may limit how much the can actually spend, but every asset is sold for the perceived value by the participants. If I have a billion dollars it only means I can pay $100 for a can of soda, it doesn't mean I value that can of soda enough to pay $100 for it.

Now, let me share why offers on Faira are better

we placed the winning bid â†’ you can see at all times where your bid ranks. If someone has a higher offer, you instantly become aware of its existence and how much higher it is. If you try to outbid it but it escalates, you also instantly get the feedback to know whether you succeeded or failed. 

way over asking price â†’ since you can see all offers on the table, the asking price's irrelevance should become self evident in case the other buyers (a.k.a. "the rest of the market but you") are already indicating that this home is worth more than an arbitrary MSRP. If there's no competition, you can still use the asking price as a guiding line for your bid, but the process of making an offer does not take the asking price into account. It's just an FYI number.

after the final deadline for offers â†’ there's no set date deadline on Faira. You can submit an offer until the home is under contract. The offer review date is a commitment by the seller to not review offers before that date, but from that point onward, the seller will continue to entertain a better offer. Deadlines don't exist anyway, so we don't even pretend that they do. 

we were prepared to go higher but were discouraged â†’  you can go and submit an offer on any active home. You judge for yourself if you want to submit an offer or not. If a buyer asks the seller or agent if they should submit an offer, the answer is `yes`, there's no other answer, no if's or but's. 

they will outperform any bid â†’ when you submit a bid on Faira, you can opt to use an automatic escalation (performed impartially by "the machine"), but if you don't want to, you can just come back and re-bid any time you feel like. If you want to find out for real if your bid will be outperformed, just submit it. You will either be immediately informed that it was outbid, or your bid will be the highest. If at a later time someone tries to outbid you, you will also be immediately informed of what happened. There's no need to speculate since you can just verify the fact (that someone will outbid you) yourself.

how is this fair â†’ buyers can always come back and submit another bid if they want to, even buyers who decided not to use an automatic escalation the first time around can come back and manually bid up. 

how can I compete against a billion dollar company? â†’ since you get to see the other bids on the table, you can decide for yourself if you value the home as much as other people do. If you don't, then you don't buy it. If you end up valuing the home more than other buyers, then it's yours. 


Ricardo Oliveira

Written by Ricardo Oliveira

Ricardo is a software engineer at Faira (and also the first employee!)


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