The 2021 real estate market has been on fire, with few signs of slowing down. This season has brought about multiple bidding wars which means, if you are house hunting at the moment, to be prepared to bid over asking price. However, how much is a competitive offer without overbidding?
Know Your Market
Determining that sweet spot of offering just enough over asking without overpaying is challenging. The first thing to help you arrive at a figure is to understand the specific market you are shopping in. By speaking with your real estate agent, they will be able to tell you not just what the city has been performing like recently, but the specific area code that you are shopping in. By zooming in as specifically as you can, you will be able to gain the greatest clarity on what houses are selling for in relation to the asking price.
For more information on how to find the right listing agent read this blog post.
Sale-To-List Ratio
One indicator that can also help you is the sale-to-list ratio. This is a percentage that dictates to what extent the current market is a buyer’s or a seller’s market. Knowing this ratio can help you better analyze the homes you are interested in and how much your offers should be. Just remember, knowing how much to go over asking price does not guarantee you a win every time, but it will be easier knowing you are not overpaying the average.
Other Tactics
In addition to considering how much you should offer over asking price, there are other ways to entice a seller to consider your offer over others. Things like flexible closing dates so the seller can find their next home, cash offers for quick closings, or other creative incentives like paying for a mover can set you apart without having to pay much over asking. Again, speak to your real estate agent to determine which solutions have proven successful in your neighbourhood to allow you to close the deal you want without going into a gritty bidding war.
So How Much Over Asking Price Should I Offer On A Home?
Unfortunately, while there is no uniformly applicable answer on how much you should bid over asking to ensure the home of your dreams, here are seven tips that will get you to be as solid of a buyer as you can be.
- Know your budget backwards and forwards
- Get preapproved for a mortgage
- Talk to your agent about the market
- Shop under your maximum comfortable mortgage amount
- Consider what else might sway a seller besides price
- Work with your agent to determine your offer price
- Be prepared for a possible low appraisal
Buying a house in a hot housing market can be daunting. Speaking with a trusted real estate agent and doing your homework beforehand can save you a lot of headache.
If you are thinking about buying a home right now and want some help along the way in this white hot market, please feel free to reach out to me here. I would love to help you secure the home of your dreams.
