When to Offer Above the Asking Price
When looking to purchase a home, many people are in a situation where their budget is one of – if not the single most – important factors to consider. On the surface, this seems like a fairly straightforward issue: you identify your budget and then you look for homes listed within this price range. While this is certainly a good place to begin, there is an important fact to consider before you set your search parameters in stone. Namely, are you in a situation where you are going to be offering more than the asking price of the home, and, if so, just how much more?
If you look at a home and are interested in placing an offer, then determining whether an offer above the asking price is necessary is a good early question to ask. The answer to this question depends on several different things:
- Being in a buyer’s or seller’s market
- Length of time on the market
- Your own desire for the home
While many areas throughout the country are firmly in the hands of sellers, there are some that are more favorable towards those looking to buy. If the market in your area leans towards benefiting the seller, then you might not need to think about making an offer over the asking price.
Buyer’s markets are usually places where there are more homes for sale than people looking to buy, which would give you a high chance of being the only offer on a home in question. If this is the case, you don’t need to worry as much about entering into a bidding war or having someone else offer significantly more than you. If, on the other hand, you live in an area with more people trying to purchase homes than there are homes for sale, you are looking at a different dynamic and might need to consider if you are going to offer over the asking price.
Length of Time on the Market
A home with a listing several months old is a home that is not receiving a lot of interest. In this case, you will definitely want to talk with your realtor about whether or not an offer at or below asking price is worth considering.
Keep in mind that a stale listing is usually stale for a reason, meaning that you might be required to put in a lot of work before the home is truly comfortable, but if you’re not scared by a list of home improvement tasks then this is a great way to ensure that you don’t wind up paying more than a home is worth.
Your Own Desire
Regardless of any other factors, if you visit a home and feel that it is the perfect home for you, you might want to seriously consider offering over the asking price to ensure that you are placing the most competitive offer possible. Like we’ve said before, this is a great thing to discuss with your realtor who can help you think somewhat objectively about whether or not a home is worth the additional financial investment and, if so, just how much over the asking price you might want to go.