How to be a Smart Home Buyer in the 2009 Housing Market

Posted on November 9, 2009
Filed Under Home Buying | Leave a Comment

Home buyers need to be savvy to selling strategies by owners.

So, you’re trying to buy a house in a new neighborhood. You’ve read the listing backwards and forwards and know the listed asking price. Think you are being smart by offering that price or maybe even lower? Not necessarily.

Advertised listing price – solid deal or just a starting point?

Smart Home Buyer

These days buying or selling a house can seem to be a very complicated procedure for either party. With many homes going unsold for months and others ending up in foreclosure, buyers may believe that they don’t have to make an offer on a home that at least equals the listed price.

The truth is, there is very strong competition amongst people looking to buy homes because many of them are anxious to make their deals final before the Nov. 30 tax credit deadline. They fear that commercial investors will beat them to what they see as rock bottom property selling prices.

This is causing some markets to end up with homes getting multiple offers that may equal much more than the listed cost.

How does a buyer know what is the correct offer?

Some buyers see the listed price as a suggested starting point, even if that isn’t in the “rule book.” When a potential buyer makes an offer, real estate agents using tell them to give an amount higher than the listing price to ensure they get the chance to be in the borrowing game for the property. If more than one person wants the same house, just making a listing price offer may not be good enough.

You want to come out on top, so it’s best to be willing to put out an offer somewhat higher than the list price. How much that is depends on your budget, the home’s actual value and how much you want it. Be aggressive. Don’t assume that just because recently it’s been a buyer’s market or that the property may be a foreclosure to make it a sure thing for you to have your first offer accepted.

So, what kind of strategy should you have?

Like I mentioned, multiple offers and selling prices higher than the listed price are becoming much more common. If you are in the market for a house, ask an agent to talk to you about local ratios of the asking prices to the actual selling prices of recently sold homes.

Do your homework and be armed with the information you need so you can make an offer on your “dream home” that stands a good chance of being accepted. Your reward is home ownership. Happy hunting!