For generations, the process of buying and selling a home has generally stayed the same. A homeowner would estimate the value of their house, add on a little extra to allow for negotiating room, and that figure would become the listing price. Buyers would then determine how much less than the full price they could offer and still get the home.
As a result, the actual sales price would almost always be somewhat lower than what was listed. It was unlikely for a buyer to pay more than what the seller was asking.
Times Have Changed
The low inventory of homes for sale paired with strong buyer demand is leading to a rise in bidding wars on many homes. Because of this, homes today often sell for more than the list price.
Change your Perspective
In this market, you likely can’t shop for a home with the former approach of negotiating to a lower price.
Due to the low supply of houses for sale, many homes are now being offered in an auction-like atmosphere in which the highest bidder wins the home.
When navigating a competitive housing market, think of the list price of the house as the reserve price at an auction. It’s the minimum the seller will accept in many cases. Today, the asking price is often becoming the floor of the negotiation rather than the ceiling. Therefore, if you really love a home, know that it may ultimately sell for more than the sellers are asking. So, as you’re navigating the homebuying process, make sure you know your budget.
Connect with a Trusted Real Estate Professional
Frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions right now. Having a trusted real estate professional on your side to provide guidance on how to make a competitive offer on a home is important. Connect with us today to learn more!