Written by: Amanda Worsell
We’re seeing a lot of listings going well over list price right now. Some are priced low to draw in multiple offers, while others are going over market value. This has to do with supply and demand. It’s a sellers market with more buyers than inventory. This is great news for sellers.
As for buyers…
- Talk to a Realtor® (preferably not the listing agent) about the actual market value of the property you are interested in.
- Sit down with your Mortgage Broker or Bank, get a full pre approval, and know your limits.
- Falling in love with a house may push you to spend more than the property is worth. Try not to let your emotions get too involved; As difficult as that may be.
- If you do end up spending more than market value, make sure to have extra money set aside. When the house is about to close and the mortgage appraiser values it under what you offered, you may have to quickly come up with the shortfall. The last thing you want to worry about at closing is coming up with extra money.
- Multiple offers may scare you into putting in an offer without conditions. This is not in your best interest. If possible, take care of everything (ex. financing, inspection, insurance…) prior to putting in the offer.
- Keep in mind – In our economy, house prices generally increase in value over time. If you buy a house now that is over market value and you sell it in a few years, you may not be making any money. Or worse, what if some unforeseen circumstances arise and you have to re-sell sooner than later. Now, no one is willing to pay for your house over market value and you loose money.
- Finally, don’t let this discourage you. You can still get most houses today at, and sometimes under, market value.
Would you like to discuss this further? I would love to chat.