We’re In a Highly Competitive Market

Why is That?

First and foremost there are far more home buyers in the market than there are homes for sale. It’s a simple case of supply and demand. The shortage is such that every desirable home that is priced right is receiving multiple offers which drive home prices up. On top of the shortage (because of the shortage really) home prices continue to escalate.

According to the National Association of Realtors®, in December 2020 home prices rose 12.9% (nationwide) and that is expected to increase even more in 2021. Fortunately for home buyers, interest rates are still historically low.

Fierce Competition

Let’s talk about the multiple offer situation for a minute. Well kept and attractively presented homes, including investor rehabbed properties in good locations are receiving as many as 6 to 10 offers. As a buyer, there are a number of things that you have to keep in mind so as to not bid yourself out of a home by:

  • Offering more for a home then your loan qualification
  • Ensuring your have enough for a down payment (as your offer price increases, so does your down payment)
  • Asking yourself “do I want to pay more for a house than it’s appraised value?” FYI: Your down payment would be the difference between the appraised value and the higher price you offered
  • Getting caught up in the frenzy and loosing sight of their objectives
  • I would caution you also that once you offer a higher price, things may get tense if an appraisal comes back lower and the seller is unwilling to negotiate. Your Realtor® should be instrumental in helping you come up with an offer price based on your qualifications.

Part of the buyer’s agent job is to help buyers stay focused on their goals. However, goals may shift and have to be frequently re-evaluated based on the realty of the market. As always when it comes to buying a home, it’s only once house hunting begins that buyers are awaken to just how much home their money will really buy. It’s an eye-opener for sure.

Homebuyers are having to make offers on a number of properties before a seller finally accepts their offer. Almost every home buyer, if not EVERY, is going through the exact same thing. Be prepared to be a little flexible with regard to your wants and needs including amenities and location. If you are stuck on certain criteria, be prepared to stick it out and be in the market for a while and that’s perfectly okay. I must caution you that patience will be an inescapable requirement. Keep your cool and remain optimistic.

I am a firm believer that home buyers do not lose out on homes that are meant for them. In order words, all the homes that you didn’t get, were homes that were not meant for you.

Happy housing hunting and contact me for questions. It wont’ cost you a dime.

photo credit: myoldpostcards William H. Linn House, 300 Block W. Main St., Decatur, Illinois via photopin (license)