If You’re a Buyer,
In today’s real estate market, buyers shouldn’t shop for a home with the expectation they’ll be able to negotiate a lower sales price. In a typical housing market, buyers try to determine how much less than the asking
price they can offer and still get the home. From there, the buyer and seller typically negotiate and agree on a revised price somewhere in the middle.
Is Offering Asking Price Enough?
Things Are Different TodayToday’s housing market is anything but normal. According to the National Association of Realtors(NAR), homes today are:
- Receiving an average of 3.8 offers
- Selling in just 17 days
“The imbalance between robust demand and dismal availability of for-sale homes has led to a continual bidding over asking prices, which reached record levels in recent months. Now, almost 6 in 10 homes listed are selling over the asking price.”
You May Need To Rethink How You Look at a Home’s Asking PriceWhat does that mean for you? If you’ve found your dream home, you need to be realistic about today’s housing market and how that impacts the offer you’ll make. Offering below or even at a home’s asking price may not cut it. In today’s market, the highest bidder often wins the home, much like at an auction.
Currently, the asking price is often the floor of the negotiation rather than the ceiling. If you really love a home, it may ultimately sell for more than the sellers are asking. That’s important to keep in mind as you work with your agent to craft an offer.
Understand An Appraisal Gap Can HappenBecause of today’s home price appreciation and the auction-like atmosphere in the selling process, appraisal gaps – the gap between the price of your contract and the appraisal for the house – are more frequent.
According to data from CoreLogic:
“Beginning in January 2020, nationally, 7% of purchase transactions had a contract price above the appraisal, but by May 2021, the frequency had increased to 19% of purchase transactions.”When this happens, your lender won’t loan you more than the home’s appraised value, and the seller may ask you to make up the difference out of pocket. Buyers in today’s market need to be prepared for this possibility. Know your budget, know what you can afford, and work with a trusted advisor who can offer expert advice along the way.
Let’s connect today to discuss the options that are best for you.
Watermark Real Estate Group: 843-989-0065
Bottom LineBidding wars and today’s auction-like atmosphere mean buyers need to rethink how they look at the asking price of a home. Let’s connect so you have a trusted real estate professional who can advise you on the current market and help determine what the market value is on your dream home.
Buy with Confidence | Sell with Success