There is a trend happening in the hottest real estate markets across the country that has shown to be very beneficial for sellers but maybe less so for buyers. When a real estate market is super-hot, buyers are simply going in with the mentality that offering way above asking price is the best way to land their dream home.
However, there’s a time and a place where offering over asking price is a great idea and other times when you’ll just end up digging yourself a hole. Keep reading to learn more about the right time to go all in and when to fold in anticipation of the next hand to be dealt.
When Should You Offer Over Asking Price for Real Estate?
There are a few key situations where offering above asking price on a home is in your best interest. But there’s a fine line between making a great decision for your future and getting yourself way in over your head financially. So, it pays to do your research before you buy.
1. You’re buying in a seller’s market
When you’re searching for your dream home in a seller’s market, demand greatly outweighs supply. This means that you’ll be facing steep competition and typically need to act quickly and bid high to make a deal with sellers.
2. You know you’re going up against other offers
In a seller’s market, it’s common for bidding wars to erupt very quickly. Always check to see if there have been other bids made on a home before you put in an offer. Then from there, you can decide whether you want to go in with your highest offer.
3. The seller isn’t motivated
Finally, you may come across a situation where the seller doesn’t seem like they’re in a hurry to sell and move on. If sellers are simply putting their home up for sale to “test the market” a substantial offer can make them agree to a sale.
