Buyers are currently paying too much for homes. Here’s how to avoid that.
These days, most buyers are paying too much for the homes they’re buying. I’m not talking just about the price of the property; I’m also talking about their experience from the day they begin looking until their offer is accepted. I’ve been doing a ton of research on this, most of it through our clients, and what I’ve found is that the standard buyer in our current market is missing out on an average of three properties before they get an offer accepted. This then results in buyers paying too much money for homes. More is less in a market that’s appreciating as aggressively as the one we’re in right now.
A real-life example: I had a client that was pre-approved for $750,000. She was looking in a particular area she liked, and we found an excellent house that was listed for $740,000. At first, she was tentative and wanted to negotiate. Many buyers want to do this; they’ll offer $730,000 to see what happens.
Well, what happens is we won’t even receive a counteroffer. In this case, the property sold for $742,000. Had my client come in a bit higher on her offer, she still would have gotten the home for within her price range.
Then, the next house in the area that was comparable was listed for $745,000. They understood that they could get a little more for their property based on what the previous one sold for. I told her to offer $747,000 and show the seller we mean business before she missed out on another home. However, she decided to offer $740,000, and again, we didn’t get a counteroffer.
The third house that was comparable was listed for $755,000, and she doesn’t qualify for it. We submitted an offer of $750,000, and it wasn’t accepted. Now she’s looking in another area because she can no longer afford the appreciating home prices in her first-choice neighborhood. Unfortunately, she’s now settling for an area that isn’t her top choice because she didn’t offer the best price in the beginning. Also, the person that paid $755,000 could have gotten the property earlier for $742,000 but overpaid because they weren’t as aggressive from the get-go.
If you’re a buyer looking for a home, understand what you qualify for and know that you may have to go a bit higher to get the house you want. However, the sooner you get that property, the better—because each home will get more expensive, and that trend will continue. Then you’ll either have to settle or pay more than you wanted.
If you want to discuss buying a property and learn how my team and I support our clients and get them the best deal possible, send me an email or give me a call. I’d love to connect with you. Also, if you have any ideas for videos you’d like to see in the future, send those my way too.