In today's market it should be known, that many sellers, especially the resellers, or "flippers" that buy foreclosed homes, fix them up and resale for a profit, and also listing agents for bank owned REO properties have an interesting marketing technique whereas they list the property for a price under market value purposely, collect several offers from the buyers who are attracted by the price, then the sellers send out a multiple offer notice to buyers and asking them to make their "highest and best" offer. It is a fair practice, but it creates an artificial buying hysteria that takes. I tracked one well known reseller over the past year, and they had sold 300 properties in 2011, and the average sale price was $4000. higher than the average asking price. Very few of them sold for less than asking price and most of them sold for more than asking price, but the average was about $4000. higher.
So the lesson to learn here is that asking prices for most REO and "flipped" properties is just a starting point, and that buyers need to carefully study the comparable sales in the neighborhood to help in making the decision to bid higher than the asking price.
