Q: Twice we have lost out on purchasing a home due to a 10% overbid. Even crazier, these properties were already overpriced when they came on the market. Is the buyer or buyer’s agent orchestrating this ridiculous overbidding? Our buyer’s agent said she would not engage in such reckless homebuying representation. Granted, it is commendable to have a buyer’s agent who looks out for our best interest. But soon this ludicrous process of obscene overbidding in neighborhoods with excellent schools will price us out. 

Of course, we can buy similar homes in equally appealing neighborhoods in other cities for 60% or 70% of these prices. We could place our children in private schools in these less expensive towns. By avoiding the bidding frenzy for excellent public schools, we’ll save money over time, but it also means driving to and from private schools. 

Are we just unlucky to twice go up against 10% overbidding? Is this likely to happen to us a third time? And is the buyer or the buyer’s agent structuring this high-stakes overbidding?

A: It is often the male buyer’s agent who drives buyers to pursue these crazy overbids. Malcolm Gladwell would have to research why.

Dot-com havoc also created the noncontingent offer and fueled daredevil overbidding. Sellers and most listing agents loved it. At the time, I wrote in this column about the risks home sellers faced if they accepted noncontingent offers. Soon, Silicon Valley brokerages created hold harmless advisories for the sellers and homebuyers to sign. The seller’s agency requested that the home sellers counteroffer any noncontingent purchase offer with at least a 72-hour “cooling-off period.”

The real estate attorneys working for brokerages understood that disgruntled homebuyers file the majority of lawsuits claiming “I didn’t understand” and “I relied on my agent.” Conversely, homebuyers signed these like-kind in-house advisories informing them that they might be purchasing a home for more than it is worth.

These turbocharged home prices accelerating upward become the latest comparable sales for real estate appraisers, if they have not already. Put in your best offers until priced out of the high-end school neighborhood. Should you wind up driving to private schools in new cars, you’ll know luck was never far from your side.

Realtor Pat Kapowich also provides practical and tactical tips for homebuyers and home sellers at YouTube.com/PatKapowich and SiliconValleyBroker.com. Contact him at 408-245-7700, Pat@SiliconValleyBroker.com DRE# 00979413