“You can know ahead of time your maximum home buying budget will be,” reminds Jon Meyer, The Mortgage Reports loan expert and licensed MLO. This is why it’s important to get prequalified or preapproved for a loan. “You may not qualify for your mortgage loan, because the loan won’t appraise for the amount you offer,” warns Suzanne Hollander, a real estate attorney, broker, and professor of real estate at Florida International University. Making the highest offer can come back to haunt you. Potential issues when you offer above asking price So use their expertise - along with financial advice from your loan officer - to craft an offer that’s competitive and makes sense for your budget. Your real estate agent or Realtor will be with you every step of the way during the offer process. The good news is, you don’t have to go it alone. Potential buyers who can best meet a seller’s top considerations are more likely to have their offers accepted. no financing contingency, no inspection contingency, and no appraisal contingency, be it one or all, may be a top consideration,” says Realtor and real estate attorney Bruce Ailion. Price isn’t your only negotiating toolĮven in a bidding war, price is not always the only consideration a seller has.
“Currently, I am seeing more homes sell for asking price or just below asking price,” he adds. While we were seeing low inventory and multiple offers, we have returned to a more balanced market,” says Candella. “The market conditions in the Denver Metro area have certainly slowed in the last couple of months. Phillip Candella, a real estate agent in Colorado, agrees. “In 2022, home buyers should expect to pay at or around the asking price on a home, provided the home is priced accurately and in good shape,” he continues. “Many home sellers got a reality check in 2022, as they learned that the demand for their homes decreased slightly, leaving them to adjust their price downward,” says Gelios. Fewer buyers today have to offer above the asking priceįortunately, these types of bidding wars are becoming less common, according to Realtor and real estate author Jason Gelios. But as a buyer, there’s no golden rule for “how much is too much.” It comes down to what you can afford, what your lender will finance, and how much cash you have in the bank. On particularly competitive homes, an offer could come in far above the 1-3% threshold. He adds that offers typically need to exceed at least 1 to 3 percent over the list price when there are multiple competing buyers. “It’s not unheard of in these situations to see the winning bid come in thousands over list price,” says Philip Kranefuss, head of Real Estate in Colorado with Homie. Offers typically need to exceed at least 1 to 3 percent over list price when there are multiple competing buyers. And buyers faced extreme bidding wars - especially in desirable locations and on underpriced properties. As a result, many homes sold far above their list price. The housing market ran red-hot from 2020 through the first half of 2022. How much should you offer over the asking price? This will make negotiations a lot easier. The best thing to do is set your budget and expectations ahead of time so you know how much you can afford to offer - and when to walk away. The answer will be different in each case. Of course, every market and every home is different, and many buyers will still need to pay above the list price.
In June 2022, the average home actually sold for about 1% below its list price, according to Redfin. But today’s home buyers may face less competition. In a hot market, experts recommended offering at least 1% to 3% above the asking price in a bidding war.
Aug10 min read How much over asking price is too much?
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