Do Multiple Offers Mean You Are Overpaying?
Many of our home buyers recently have become concerned when they find the home they love, and find that there are multiple offers on the property. They are worried that they may overpay for the home. Is this concern justified? Well, everyone has an opinion about where the real estate market is headed from here, and we will stress what we always do about local real estate, that is, IT’S LOCAL! Speak with an active top real estate agent in your market to get counseling before you decide. That said, there are some general market conditions that we can look at to before you make a decision.
- Most professionals believe that we are at a cyclical low in the market. Real estate goes up and goes down just like any other market. An investor always tries to buy low and sell high. Which people are driving the market up in many markets across America right now? Investors. If you want to make money in real estate, you don’t have to be smart, just observant. Do what successful investors do, and right now they are buying.
- Interest rates are at or near all time lows, and it won’t last forever. When the economy recovers, and it always does, the rates will go up. It’s not a question of if, it’s a question of when.
- Demand for affordable properties is very high in many markets right now. This is why we see multiple offers on clean, well priced homes. The market determines the price, not agents, and not sellers. When there is steady increasing demand, prices go up. So instead of worrying about overpaying in a multiple bid scenario, focus instead on the other factors described here. Paying a few thousand more for a home is not an issue when you are looking at the big picture.
- Look at value, not price. Is buying a good value compared to renting? Based on the current market situation, absolutely. There is great value in the market today. It is hard for us to imagine anyone getting hurt by buying a home right now provided that they plan to be in in it several years or more. If your job is not secure, or there is good potential for relocation, you should probably rent until your situation is a little more stable.
- Do a detailed analysis about the cost of buying vs. renting. Spread it out over 3, 5, or 7 years, and evaluate the total cost. When you are looking at the buying option, be sure to factor in tax savings, evaluation potential, insurance savings, and the cost of repairs. Look for the bottom line difference after all of these items are considered.
So, before you let yourself get flustered about paying a little more for a home, remember to keep your eyes on why you thought buying a home was a good idea in the first place. Make sure you are taking advantage of the knowledge and experience of local real estate professionals. It is their job to understand your local market. Find a good one, trust their opinion, and get on with living in the home of your dreams!
Tucson Power Group at Keller Williams can help you find a seasoned professional for local advice anywhere in North America. Call us today! For more relevant real estate information, like us on facebook or follow us on twitter.