Although the market has had a few positive indicators showing improvement such as lower interest rates and lower home prices, the market is still having a tough time recovering from what seems to be a sluggish time for home sales. Inman news wrote an article with a few great tips on this subject. Here is what they mention…
Multiple offers in a down market occur when:
- The listing is in a good location
- The listing is in good condition
- The listing is priced at or below market pricing
If a prime listing is priced below the market value, paying over the listing price may make sense if you are not paying over the current market value. This may attract many offers which would end in a sale price above justification so be careful of your offer.
Here is an example:
- A house with multiple offers on it (7 to be exact) and ended up closing at $200,000 over the asking price with three offers still higher than theirs.
- If the house needed to be sold six months down the road, more than likely, it wouldn’t sell for the price paid for it. The home wouldn’t have the same attractive appeal it originally had at a price $200,000 less.
- Reflection of fair market value cannot be reflected when a buyer or seller is under distress.
- Paying more than the asking price is not necessarily a decision that makes sense unless the home you’re purchasing is home you will live in forever or you simply can afford it without causing financial hardship if a move was in order or for any other given reason, the house needed to be sold in a short time frame.
- Buying a home over the listing price in a buyer’s market isn’t necessarily a bad idea. If the home suits all of your needs and wants, the purchase will be worth every penny.
The decision is ultimately yours but should be based on an understanding of the market value of the home, the area and your financial situation as well as your ultimate goal. Just be aware, if you pay more than market value it may not sell for the price you paid.For more info on this topic, CLICK HERE to read the full story published by Inman News!