We constantly see the phrase sold over asking. Many people think that if a property is sold over asking the buyer has paid too much or the listing agent is a rock star and has created a miracle and won a massive windfall for the seller. In reality this cannot be farther from the truth in most cases.
The method that most listing agents use to market properties in most instances is the property is listed at a low value to garner excitement and increase the amount of showings. An offer date is set and then any interested parties are asked to send in offers on the prescribed time and date. The property then garners numerous offers ranging from the original asking price up to market value offers. When the property was first listed the Listing Agent gave the seller a market assessment of the value of the home. In most cases the final sale price of the home lands in that range... or should. In other words. The home sells for aproxamately market value which shouldn't be a great surprise to anyone. The questions remains, is this strategy viable and successful. Unfortunately in my opinion the answer to that is yes it is effective. Mostly because we have engineered the market to accept it. Does it work in all price categories? No. In the Luxury market this strategy does not generally work as there is a smaller buyer pool and days on market is generally higher. There is much less impulsivity in the higher end market.
Overall this strategy has evolved to replace the old research the home and set a value model then negotiate with the Buyer. Now we did see multiple offers in the "old days" however that was just happenstance. I called it Murphy's law...
Where this current situation is really damaging is because buyers are competing they are compelled to drop conditions like inspection and finance from thier offers. This is the biggest problem. Buyers are dropping important safeguards in their buying process. Now this is not happening in all cases but I would venture in most.
The other frustrating part of this marketing strategy is that from a Buyers standpoint when searching for a property the List price of the home is extremely vague and doesn't give the buyers a reasonable idea of the value of the home. This alone makes the home search more difficult. Rather than looking at a list of homes with expected value we have a list of 899, 999, 799 homes that could be 50k, 100k or 200k under valued. There is no uniform policy for listing homes with this method. No matter what anyone says there is NO Rule of Thumb here. Some people think they can just tag on 100k to the asking price. I can show countless examples of comparible homes listed for vastly different prices.
In conclusion Don't be fooled by the sign that reads Sold Over Asking... Ask your Buyer Agent for guidence.