Home Buyer |Real Name Hidden|
San Diego, CA
I am a first time home buyer and every time I like a property my realtor automatically suggests for me to place my bid atleast 10,000 – 15,000dollars more than the asking price. He tells me that I have to come in with a high enough offer so we can win the bid. However, since it is currently a buyers market shouldn’t I bid a bit lower or at the asking price? Why does my realtor always jump to such high bids?
Above is a real question asked by a buyer. Her concerns are extremely valid however contrary to what the media says “Buyers Market” they fail to say what kind of inventory the market is flooded with. Todays market is Flooded with homes that are trash and cant qualify for VA or FHA financing (This is the majority of loans being used right now to purchase homes). Now, the homes that are in good shape have multiple bids on them; sometimes 20-30k above listed price. . Buyers today do not want a deal they want a STEAL! But with multiple bids and her offers coming in with the STEAL mentality the seller or bank will simply throw out her offer because it is to low.
Buyers need to understand that listing agents sometimes list properties way below their actual value to entice “Bidding wars”. Todays computer savvy buyer would see these prices and think they can bid even lower. This is normal though, I myself would try to buy anything lower than what the price is listed @.
Let me give you a scenario; A buyer wants to sell his home, the comparable’s in the neighborhood are selling @ 320k+. Sometimes a listing agent will list this property at $299,500 We know that the homes in the neighborhood are selling around 320k and above but the agent has marketed this property to get as many offers he can in the shortest amount of time. Now…. Here comes the internet home searcher who see’s this home selling for $299,500. With the media blanket telling everyone our real estate market is flooded and in shambles the internet searcher will 98% of the time assume that “there are not enough buyers, market is flooded, I’m pre-approved, they’re bound to accept my offer etc..” With those assumptions the buyer will tell their agent that they want to submit an offer for $280,500 and sometimes even less. Here comes the part where the homebuyer starts to question their agents interest’s..”Why would my agent tell me to bid higher than the listing price?, We are in a buyers market..” That agent knows very well that the last home sold in the same neighborhood was above the listed price. Any prudent real estate agent working today will in the best interest of their client tell them to bid higher.
They are not trying to make it harder, make more commission or anything like that, They simply want to fulfill their fiduciary duty and get you in a home in the shortest amount of time.
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