Marin County California is one of the most expensive residential real estate markets in the country. It is also one of the most competitive markets with more than 45% of all single-family homes in 2018 receiving multiple offers. How does a buyer or buyer’s agent determine the optimal price to bid on a home - a price high enough to win the bidding war, yet not too high over the next highest bid. Essentially it is a classic auction problem.
The web app below (or at this link Multiple Offer Calculator) enables the user to determine the predicted price to pay for a home facing a bidding a war. The predicted price is based on historical data from 2015 - 2019 for all single-family homes sold in Marin receiving two or more offers. The user can select the area, number of bedrooms, number of baths, number of expected offers and listing price and the app will provide the predicted sales price.
As a rule of thumb, real estate agents have used anywhere from 2 to 3 percent per offer to determine the price to pay in a bidding war. For example, if there are 3 offers the bid should be anywhere from 6% to 9% over the list price.
To use the web app simply select the Predict tab, select the criteria and the app will return the predicted offer price. For an explanation of the goals, data, evaluation protocol and model selection use the Explain tab. The Evaluation tab provides metrics used to evaluate the accuracy of the predictions versus the actual winning offers.
Marin Real Estate Data Source: Marin MLS (BAREIS), 2015-2019 Data