When Should I Offer More than the Asking Price?

In buying a home, it is important that you look into the asking price of the property. Every homebuyer should know this. It could help them obtain an idea on how much money to put up, in the first place. And how much of the purchase price should they be financing. Simply saying, this will be one of the bases for determining the affordability of the purchase.

If the asking price is right, people will normally be drawn to check the place out. If the condition of the property is acceptable, they may walk out in the end with an offer in mind. In most cases, prices offered by the buyers are slightly below the asking price. The rule of thumb in making offers as to prices really depends on the practices of the Real estate agents. In most cases, the offer price can be as much as 5% below the asking price. If the property has been on the market for a long time, it can go as much as 10% below the asking price. As you can see, the trend in offering these days is usually below the asking price.

However, there may be instances when the seller will not settle for anything less. As a result, buyers would end up offering more than the asking price. How can this happen? Here are some instances:

1. The perfect everything- Certain properties are perfect in everything. They are located in the best neighborhoods in town. They have the best schools nearby. Transportation is accessible. Business centers are everywhere. And the amenities are just awesome. If the prices of these homes are just way too affordable, people will be boxing their way in to get the seller's attention. And one way to do it (especially when every buyer in town has their eye on the property) is to offer more than the asking price.

2. Booming real estate market- If this is the current status of the real estate market; it is expected that values of the homes are soaring. Even if prices are high, there will still be a high turnover in sales. It may even reach to the point wherein the demand for properties will exceed the current supply. Therefore, every time a property is being put up for sale, it could become the next hot item in the market. Eager buyers may be willing to pay for the asking price of the property. However, if everybody settles for the asking price, sellers would not be enticed to settle to any of the offers. They are in the position to name their price. As a result, desperate buyers may come up with an offer higher than the asking price to make theirs unique and noticeable.

3. Existence of a willing buyer- There may be buyers who are willing to spend money for the homes they want. If the seller's property is exactly what they want, some buyers will do anything to make sure it will become theirs. They can even do it just to eliminate competition and to ensure their demands in lieu to the buying process.

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