Several Factors to Consider When Making An Offer
Roseville, Calif. – One way to get your offer noticed and to standout in buyer competitive situation is to offer more money than the asking price.
It is a common strategy when a well priced home in a good neighborhood goes on the market and you want to get the seller’s attention. It can be the reason yours is the winning offer.
Before exceeding the asking price with your offer, buyers should consider several factors.
- Before making a higher offer you need to understand the financial impact, will you be okay with larger monthly payments?
- How much do you want the house? Is this the best home for you in the right location? Make sure you want the house and not just to get it into contract.
- Will the house appraise for what you are offering? You will need some help from your Realtor on this one. If the house does not appraise at the higher amount, do you have the extra cash to cover the mortgage shortfall?
Offering above the asking price can help outbid the competition but it can also lead to paying more than the house is worth. It is not always clear how much competition there is and how high to go over the asking price. There is no magic formula for determining how much above the asking price to offer, it depends on the market. Again, this is where an experienced Realtor can be helpful.
When buying a house in a competitive situation it is wise to view the “big picture.” It is not always about price for sellers. Have your agent see what they can find out about the sellers and their needs. It may be they are looking for quick close or the reverse, looking for time to move. Your agent can be a big help and guide you in how to present an attractive offer to the seller.
