Should You Go Over Asking Price?
When making an offer on Cedar City homes for sale, it's important to carefully consider the amount. Offer too little, and you risk your offer being rejected. Offer too much, and the bank may not appraise the home for the amount you offered.
This does not mean, however, that you should never offer more than the asking price for a home. The strategy may sound strange at first. You wouldn't offer more than the sticker price for a car, and you wouldn't purposefully pay an extra $100 for a grill at the store. But buying real estate is quite different, and sometimes, making an offer over asking price makes sense. Here are some situations in which it may be a good strategy.
You know there will be multiple offers.
Right now, we are in a seller's market. In other words, there are more buyers than there are homes for sale. This means most sellers get multiple offers on their home. Naturally, they tend to accept the highest offer.
In such a competitive market, you often need to make an offer above asking price to edge out the competition. If there are three offers at asking price, but you offer 2% above asking price, you're more likely to have the winning offer.
The house is under-priced.
Sometimes sellers who are really motivated and need to be out of their home ASAP will under-price their homes. They know this will draw more attention and bring in multiple offers quickly.
If you and our real estate agents agree that a home is under-priced, then offering over asking price makes sense. You'll out-compete the other buyers who make asking price offers in hopes of scoring a deal, and you still won't be over-paying.
You need to beat a cash offer.
Say your agent talks to the buyer's agent and finds out that there is a pending offer on the home, and it's a cash offer. Cash offers are hard to beat. They mean less hassle and a shorter closing time, which is very appealing to sellers.
If you make a similar offer, but with financing, the seller is unlikely to choose yours over the cash offer. However, by offering more than the asking price, you make it worth it for the seller to accept your offer.
The seller has turned down numerous offers in the past.
What if you know there have been multiple offers on the home, but they have all been turned down? The home is still on the market, but you don't want to be yet another buyer whose offer is rejected.
A seller who behaves like this is often said to be "unmotivated." They are only going to sell if it's really worth their while to do so. If you really want the home, making an offer over asking is usually the way to get their attention.
You can't stand to lose the home.
Maybe this is the only home you've seen all month that meets your needs. Or perhaps you need to move in by a certain date, and you really can't afford to have another offer rejected. Making an offer over the asking price is a good way to get a little extra insurance and ensure you don't lose the home.
Deciding how much to offer for a home is not easy! It's important to have a good agent on your side to help you make these decisions. Contact us if you're looking for a reliable agent to guide you through the home buying process.