Offering over asking price can make even experienced home buyers shudder. But paying more than a seller's asking price can make sense for some home buyers. So, when should you aim high? Check out these 5 times offering more than asking price might be the right decision.
1. You Can Afford to Pay Over Asking Price. Remember that the home still has to be appraised for the asking price if you're getting a mortgage. Otherwise you'll be stuck paying for anything above that amount.
2. It's a Seller's Market. A seller's market is when there are more home buyers looking for homes than there are homes on the market. It's also a good idea to be pre-approved for a home loan and be ready to act quickly when you find a home you want to make on offer on.
3. The House is Obviously Under Priced. Some homeowners choose to list their property for well under market value in an effort to start a bidding war. You should work with your real estate agent to determine the home's market value, and make an (over asking price) offer from there.
4. You're Competing with Cash Buyers. Cash buyers are often seen as the "safe" choice as they have the proof of funds to close on the home without jumping through the hoops of getting a loan. If you find yourself being outbid by cash buyers, going a bit over asking price may be what seals the deal for you.
5. You LOVE the Home. If you can't imagine living anywhere else and have your heart set on one home, it may be worth it to you to pay more than what the seller is asking, if the situation requires it.
If you are planning to purchase a home, work closely with your lender and your real estate agent to find a home that meets your needs and your budget. An experienced agent, who is an expert at buying and selling homes in the neighborhoods you're looking in, can make a huge difference in your home buying experience. If you are planning to purchase a home, feel free to reach out with any questions. 775-453-4568.