For generations, the process of buying a home has never really changed. The seller would try to estimate the market value of the house and add a little more to have some negotiation margin. That value would become the advertised price of the home. Buyers would offer less than the listed price and still be able to buy the house.
The asking price was generally the ceiling of the negotiation. The actual selling price would almost always be slightly lower than the list price. It was unthinkable to pay more than the seller was asking for. then they would try to offer less than the advertised price.
Today is different.
The record supply of homes for sale, coupled with very strong demand from buyers, is leading to an increase in bidding wars in many homes. Because of this, homes today are sold for more than the list price. In some cases, they sell for much more.
According to the Generational Trends for Buyers and Sellers of Real Estate report recently released by the National Association of Realtors (NAR), 45% of buyers have paid the full price or more.
It may be necessary to change the way you view the asking price of a home.
When navigating a competitive real estate market, think of the list price of the home as the reserve price at an auction. It is the minimum that the seller accepts in many cases. Today, the asking price is often becoming the floor of trading, not the ceiling. So, if you really love a home, know that it can ultimately be sold for more than what the sellers are asking for.
So, when browsing the home buying process, make sure you know your budget, know how much you can afford, and work with a trusted advisor who can help you make the right decisions when buying a home.
Someone who is more familiar with the real estate market of the past than today may think that offering more for a home than the listing price is foolish. However, frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions. Let's connect so that you have the best advice on how to make a competitive offer for a home in our local market.
The information contained and the opinions expressed in this article should not be interpreted as investment advice. Nothing here should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keep Current Matters, Inc. is not responsible for any loss or damage caused by your reliance on the information or opinions contained herein.