Properties are increasingly being marketed through a bidding process. But what exactly does this term mean?

Similar to an auction, a minimum price is (usually) set for the property and bids are submitted. It is explicitly stated that this is a bidding process. After a — typically short — specified deadline, the seller can then decide whether to accept a bid and from whom. Until that point, the property can usually be viewed at fixed appointments, giving prospective buyers time to make a decision about their bid and potentially arrange financing.

What distinguishes the bidding process from a traditional auction?

The seller is free to decide whether or not to accept a bid. They may also choose to reject all bids or accept one that is not the highest. A purchase contract is only formed once the seller has formally accepted a bid.

What are the advantages of the bidding process?

Aside from the seller’s freedom to choose — as described above — a fair market price is usually achieved within a short time frame. This eliminates the need for prolonged waiting and negotiations.

For the buyer, the bidding process offers the opportunity to propose a price they consider fair without drawn-out negotiations — though with the risk that their bid may not be accepted.