Buyers today should consider the list price for a home as just an opening bid in an auction. If you are looking at homes at the top of your budget, then you need to adjust your search from 10 to 20% lower to have any hope of winning the bid. Whatever the list price is, the final contract price will be higher. Depending on the property, it could be much higher.
We are in the strongest Seller’s Market ever, and instead of becoming frustrated at the change in the rules of operation, Buyers need to work with the hand they have been dealt. Here are some things that Buyers can do to deal with the situation:
Make Your Opening Bid As Strong As Possible
I spoke with some fellow agents and brokers about their experiences with trying to win a bid. Those who kept losing, even when they could have gone higher, were thinking they could always up the offer later. This is a fast market right now. Sellers are looking for the highest and best offer right out of the gate. That means price, terms, and conditions. A great real estate agent will know the tips and tricks to make your offer stand out. Listen to your experienced buyer’s agent.
Remember You Already Reaped Your Reward If You Sold This Year
If you sold a property this year, then you most likely got top dollar for your home, and were rewarded when you sold it. Take that money and reinvest it in your next home. Instead of focusing on home prices, think about what a home means to you, and go after a property that will meet your needs.
Don’t Fear Future Home Prices
Experts agree that this economy is not like the crash of 2006. Money is being pumped into the economy, and interest rates remain incredibly low. Though there have been home price gains across most of the country, averaging about 15% nationwide, there will be a slowdown to more normal appreciation over the next few years. We most likely will see homes increase by 3 or 4% per year, instead of the up to 25% we have seen in some areas. Will you be happy with investing in a home purchase right now? Experts say yes.
The bottom line is to remember that Real Estate will remain a good investment for the foreseeable future. Find a home you love and place a bid as soon as you can, with the best terms that you can offer. Owning a home is one of the most rewarding things for your happiness and wealth building.
