Real estate bidding wars: If U can’t beat’em, regulate or preempt ’em
“Is there a way to really determine when other buyers truly exist? ” Perceptivelistener, CandresVRM addressed your question yesterday in one of the 20+ posts that was erased. Fortunately, I copied part of his response in my comment which is resubmitted below:
BRAVO! CandresVRM wrote:
“A fair system that could identify real bidders can be built with today’s technology. Information cards are a digital credential that can be issued by an identity provider such as Equifax or Acxiom that can without revealing who you are, electronically and instantaneously verify that what you claim about yourself is accurate.
While such a system does not exist today, a service that registers qualified home buyers and could be used to prove these folks are legitimate potential bidders without sharing identifying details or offer specifics could be built for under $1M from existing technology.
The existence of such a system could become common practice in a few years.”
In the absence of legislation or mandatory regulation, it might take a few years for this to become “common practice” but pieces of the technology and underlying data standards are already in place.
To me, the question is political will! If multi-billion dollar could be allocated over weekends to rescue Wall Street institutions, what would it take to get some funding from the public or private sector to create a variety of demonstration projects to test whether regulating BLIND bidding wars is both possible and beneficial.
One of the benefits of creating the kind of buyer certification system you describe is that sellers would then be able to search buyer profiles (at least those buyers willing to make their search criteria public), as easily as buyers current search listings. (Some have called this model a reverse MLS.)
The result would be BILLIONS of dollars a year in consumer savings through reduced transaction costs (ie. commissions), as well as less tax payer exposure from irrational blind bidding.