For generations, the purchase of homes has never really changed. The seller would try to estimate the market value of the home and add a little to give himself some negotiation room. That figure would become the listing price of the house. Buyers then try to determine how much less than the full price they could offer and still get the home. The price requirement was generally the ceiling of the negotiation. The actual selling price would almost always be a little lower than the catalog price. It was unthinkable to pay more than the seller asked for.
Today is another.
The record low supply of homes for sale along with very strong buying demand leads to an increase of supply wars on many homes. Because of this, homes today often sell for more than the list price. In some cases, they sell for much more.
According to the Home Buyers and Sellers Generation Trends report recently published by the National Association of Real Estate Agents (POMEGRANATE), 45% of buyers paid full price or more.
You may need to change your way of looking at the required price of a home.
In this market you probably can’t buy a home with an old school mindset of refusing to pay a full price or more for a house.
Due to the lack of inventory of houses for sale, many homes are actually offered in an auction manner in which the highest bidder wins the home. In an actual auction, the seller of an item agrees to accept the highest bid, and many sellers set a reserve price for the item they are selling. Reserve price is the minimum amount a seller will accept as a winning bid.
Navigating a competitive housing market, think of the list price of the house as the reserve price at auction. It is the minimum that the seller will accept in many cases. Today the asking price often becomes the floor of the negotiation instead of the ceiling. Therefore, if you really love a home, know that it may sell for more than the sellers ask for. So, as you navigate the home buying process, make sure you know your budget, know what you can afford, and work with a trusted advisor who can help you make all the right moves while you are buying a home.
Someone who knows the housing market of the past more than today may think that offering more for a home than the listing price is foolish. However frequent and competitive bidding wars create an auction atmosphere in many properties. Let’s connect so you have the best tips on how to do competitive offer in home in our local market.
Content previously posted in Keep Current Things