So many of my clients ask the question "Why is the list price not the sales price?"
Isn't the list price for this home what the Seller wants? My answer – sometimes. With limited inventory and a high pool of buyers multiple bids drive the list price of a home over the asking price, making it difficult for both the buyer's agent and the buyer to determine a reasonable offer that will ensure they get the home.
Homes that are priced at market or a little below market in good condition are sold within days of going on the market, and many with multiple offers. I represented a buyer who was competing against 25 offers. Unfortunately even though my client offered ten percent over list, it wasn’t enough.
Sellers don’t just look at the price when evaluating offers, they also look at the strength of the buyer, their credit, down payment, work history, etc. and terms of the contract. These terms include closing date, contingencies, repairs requested and the type of financing involved. So while price is a key factor, it is not the only factor when making offers.
What we see in our area is basic economics, supply versus demand. Not enough homes on the market to satisfy the pool of qualified buyers.
For those buyers who are entering the market, make sure you are prepared and understand the current home buying climate. Here are some tips:
- Hire a Realtor
- Get pre-approved by a lender before you start making offers
- Check comparable homes sales, this will help you determine a reasonable offer
- Have all of your finances in order
- Be ready to act quickly
Most of all don’t get discouraged. It may take two or three offers to get a home. The one you finally end up with will be your dream home.