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Bidding wars have grown common in home sales, but now they’re part of the process of renting an apartment as well. As demand outstrips supply, renters are trying to outbid others to get the property they want.
“Properties are definitely in short supply, and demand is high,” Bruce Ailion, a real state pro and attorney for Atlanta’s RE/MAX Town and Country, told realtor.com®. “For example, we had a property that had been renting for $1,260 a month. When the tenant left, we put the property on the market at $1,595 and had over 600 inquiries and close to 300 applications. That means we were underpriced for the current climate.”
Some tenants will offer over the listed price to get their application ahead in the stack. Property owners may even return to applicants and ask them to submit their “highest and best offer” in such cases. Some owners are specifying in ads for their rental units that prospects should be ready for a bidding war and should submit their very highest offer.
Austin, Texas, real estate pro Jasen Edwards told realtor.com® that in the first quarter of the year, rentals in the suburbs were sold out for 35% higher than the listed asking price.
In the Los Angeles rental market, “we’re seeing bidding wars with 10-plus offers leading to leases going for substantially over ask,” Blake Stargel, a real estate professional with Compass, told realtor.com®. “This is now the norm. According to local agents, while 10% over asking is common, particularly hot properties can go for 1.5 times the listed monthly rent.”