What shall we offer?
Perhaps the most common question would-be home buyers ask me is “What do you think this house will sell for?”.
The answer would be “Whatever someone is willing to pay for it.” (supply and demand) No one can predict the final selling price. It all depends on how many offers there are on a house, and how badly someone wants it. Incidentally, I don’t like the term “bidding war”, because that is no reason to base your offer price. I would provide you with comparable sales prices for homes in the area that have recently sold, have similar features and updates, along with the demand in market activity surround the home. But here are a couple of guidelines to help us along in the offer process:
If the home has been on the market longer than expected and the owner and their agent have never adjusted the price, the buyer might try to offer something a little lower than asking-price. Provided that the buyer (with his own agent) has done some comparing and homework, and assuming that the listing price of the house is over priced to the comparable numbers, an offer of a few thousand below asking price might be accepted.
If the listing has set an offer date and the buyer is lucky enough not to have to compete, putting in an offer a couple thousand less than asking, may work but ideally the home should be listed at the price the sellers are willing and wanting to finalize on. Again, I stress that the buyer thru his agent, has performed a comparison-study of the house, and assured that it is fairly priced. Assuming the asking price is realistic, a buyer might be well advised to count their blessings for not having to compete against a number of other buyers.
If the house has received multiple offers...than base your offer on the comparable sales and the extra value that it has to you. If you love it and you have seen that other homes in this condition sell for a price and its in a desirable area for you, than that is an extra value that I would suggest allocating to your offer price. It is always best to "Write your best offer….your walk-away price”. final price so you are not upset if it sells for slightly more than your mid price would be. If the house goes for more than your offer, you feel you’ve given it your best shot and don’t wlk away upset that you should have added an extra $1000. Breaking that $1000 down over your amortization is so small, if it meant you got the house you loved.
Multiple offer situations are not fun, but the process is really pretty simple…..put your best offer forward and hope for the best. On the plus side, at least you will find out almost immediately (within hours, anyway) whether your offer is accepted.
I’ve had a few buyers who have tried to buy a “Private Sale”, and were left hanging for a week before being rejected. In many cases, buyers can not go out and pursue other homes, while their offer is "being reviewed". Plus your deposit check is held up in the Private sellers hands and if you were to find another home that you wanted to write an offer on.....your check is being held. You couldn't write another offer without the deposit check. It seems that some private sellers are being ‘coached’ to hold on to offers and tell the buyers that they have to “think about it?”. Then, during the next week, they are trying to hustle up another offer to compete with yours to drive up the price.
In a "nut shell" .....yes, the market is hot and unfortunately the competition for homes is fierce. However, homes listed with Realtors still have certain rules to follow, whereas private sellers are pretty much left unregulated. Its ‘buyer beware’ to the extreme…