While a great agent will be able to help you decide on an offer based on the nuances of your local market, every buyer should understand the importance of offering over asking price in certain situations.
The Home is Underpriced
While rare, there will be times when a home is verifiably underpriced for your local market. While you may jump at the chance to get a deal, this low price can bring more eyes to the listing and some buyers will intentionally list their homes under market value in the hopes of sparking a bidding war. Have your agent look for comps in the area to help create a reasonable offer so that you’re not missing out.
When You Know Other Offers Have Been Made
When other buyers are interested, it’s time to sweeten the deal or risk walking away. Have your agent ask if other offers are on the table. If you know that this house is the one for you, you don’t have time to waste before making a better offer.
When the Seller Doesn’t Seem Motivated
Some sellers will list their homes simply to test the market but are still reluctant to leave. This can be an elderly couple considering downsizing their family home, for instance. If a home has a lot of sentimental value to the sellers and they don’t need to leave immediately, an offer above asking price may be just the boost they need to commit to the sale. Even an offer with as little as $2,000 – $3,000 more than ask, along with a letter to the sellers, can show them that you’re serious about buying the home.
When You Adore the Home
Buyers can tour through a few to a few dozen homes, but there is always the chance that one house seems perfect in every way. If you adore a home and couldn’t picture missing out on the opportunity to call it yours, it may be time to up your offer. If you are using a mortgage lender, keep in mind that the home must pass appraisal in order for your lender to provide you with the loan that you need.