| Comment | Going through it first hand I was amazed at the process for home reports. It seemed to be whatever the realtor comes up with as long as they are able to justify it..
It seems like a system of perverse incentives. The realtor wants a quick sale. Their commission doesn't vary hugely from deviations of around 5-10% in the sales price. They'd prefer the higher price but ultimately what they want is for the property to get off their books quickly and with little effort. So they are incentivized to put a relatively low HR Value.
Then on the other end of the spectrum, the buyers are forced to use the HR value as an index. They don't have in depth knowledge about the values of houses given the tremendous amount of criteria. The HR value is pinned to their mortgage so is incredibly important. Then perceptions are formed that bids need to be significantly higher than HR to win.
In my view these factors compound each other. Consistently sticky HR values driving a perception that consistently high minimum bids are necessary. I'm aware that other markets are similar to Glasgow with a property market demand but in my view the blind bid system with HR we have in Scotland is about the worst way you could possibly handle a limited information game. |
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