With the sub-prime mess, a volatile stock market and increasing negative media reports about the real estate market home buyers cautious as ever this year. They are looking at more homes and making fewer offers. When they do find a home they are interested in they offer less, sometimes much less than what the seller is asking.
Here are a few things to consider:
1. Not all homes are overpriced by 10 or 20% percent. When checking the latest statistics, sellers are still getting on average 94% of the asking price. We are seeing home prices decline mostly in the higher price range.
2. Most sellers will say no when the offer is for less than the value of the home. They will wait for a better offer.
3. In today’s market when a home goes on the market there could be an offer on it the first week or it may take a few months. Waiting for the price to go down doesn’t always work. The first half of 2007 saw home prices come down only 2% over last year.
There are homes that get offers the first week they are on the market. These are homes that are priced right and buyers are willing to pay close to the asking price. In some instances we are still seeing multiple offers on some homes, with buyers paying more than the asking price. There are buyers who find that perfect home but decide to hold off on it or make a low offer. Those buyers can lose out to buyers who make a serious offer right away.
Ask your REALTOR for a market analysis before making an offer. Compare the asking price of the home to others that are similar in size, area and condition to the one you are making an offer on. This will give you a better idea if the asking price is too high or right on the money. Don’t pay too much for your next home but don’t assume that all homes are overpriced and will be on the market for months either. Homes do get away so make your best offer right away!