Less conventional ways to buy and sell homes through the MLS get more attention when inventory is low, like auctions and offer platforms. Offer platforms are often confused with auctions. This is likely because both types use similar terminology, like the word “bid”.
An offer platform is a website or app where offers are collected on behalf of the selling party. Think of it like a showing system but for offers. It is an alternative to collecting offers by email and helps keep agents organized. These tools are often used to create a matrix of offers to make comparing/choosing an offer easier for the seller based on the ranking factors important to them. In situations where a property has received many offers, it can feel like an auction.
According to NAR, an auction is “an intense, accelerated real estate marketing process that involves the public sale of any property—most certainly including those that are nondistressed—through open cry, competitive bidding.” Auction listings must state whether the listing has a reserve price or that the property will be sold at auction without a reserve.
The confusion is that some offer platforms use the term bid to mean offer and some services have the term “bid” in their names. In a hot market, the difference between the two can be hard to tell. The listing agreement is typically how ARMLS decides if a property has been entered correctly in the MLS. This confusion generates many false reports even though both methods are allowed in the MLS.