Winning can be a Curse

It's true, winning can be a curse. I'm not referring to winning the lottery and having more money along with more problems. I'm also not referring to winning a prize that is a negative price, I am talking about winning a contest be being the worst guesser.

This happened to a friend of mine, David, recently. He was moving from Fayetteville, NC and needed to sell his house. He was a residential real estate broker so he had a lot of knowledge on the subject of pricing his property. He had sold my house a couple of months prior. His home was a similar layout but the two lots our homes sat on were different significantly. However, he took his experience in selling my house and others in the area to set the asking price for his home. Within 48 hours of listing his property he had 3 different offers, with one of them actually being higher than the listing price! In this instance, getting a bid of higher than he listed the his house was a winner's curse.

Although technically a "winner's curse" is defined as a in a bidding situation, the winner with the highest bid is likely to pay more than the item is worth, but in this situation, David was the winning "bid" for the comparable houses in the area that were for sale at a higher price. David was listing his house price based off of the other like properties in area and his won quickly because it was priced too low. Why wouldn't David want to have his house under contract in 48 hours? Because these quick offers means that his listing price was obviously too low and he may not gotten his EMV. He got 3 bids at that price within 48 hours when the typical house is on the market for about 3 months!

So remember be careful when bidding and pricing items, even though you are a winner, you could be a loser, like my friend David.