Bidding Wars?
So maybe it’s not like the market of 2000-2005, but more and more I am seeing homes get multiple offers and sometimes sell for more than listing price.
We call this a “bidding war” in the business, but it’s really not all that brutal. The only fact that makes it a war-like atmosphere is that in the end, only one buyer can win. However, that doesn’t mean the end of the world.
You’ve probably seen my other articles about the Steps to Home Ownership which outlines a number of action based principles for new buyers to take. In the end, we like to say that there will always be another home that fits your needs. And frankly, that’s the truth.
Buying a home is a very emotional process to begin with. Even if you approach the home purchase from an investment standpoint, which I recommend doing, you’ll still feel some butterflies in your gut when you walk into the right home. It becomes less about saving as much money as you can on the purchase, and more about getting the house.
That’s why we’re seeing these multiple offers situations again. People are finally getting off the fence about buying into a down market, and realizing that they are getting a great deal on housing with these prices and interest rates. So when they see the best house in their price range and search area, they are going after it!
Another big reason for these bidding wars is that a lot of the inventory on the market is bank owned homes. These are Foreclosures that have been taken back by the lender and therefore are being sold at a very discounted price compared to owner-occupied houses. The catch in buying a foreclosure is that there is always some work that has to be done. Whether it’s a few hundred dollars worth of work or several thousand, you won’t find a Move-in Ready home in most of these bank-owned properties.
After seeing some of the Bank-owned homes, you may start thinking that there’s no way you can afford a nice house in today’s market. But they do come around every day – you just have to be active in your search and get a Realtor’s advice on which ones are the best deals.
If there are other offers on the table, don’t hesitate and low ball the seller. Pay what you think is a fair price for the home by your Agent’s recommendation, and realize that you’re getting a good deal no matter what price you settle on.
I’ve been out showing multiple homes to several First Time Buyers that past couple weeks, and sure enough a few of the properties we have been interested in already have 2, 3, or 10 offers in (seriously, 10 offers for one house).
Just remember: if you’re on the losing end of this bidding war, keep looking. Chances are another great home is just a showing or two away.
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