The last 18 months changed what many buyers are looking for in a home. Recently, the American Institute of Architects released their AIA Home Design Trends Survey results for Q3
Is Offering Asking Price Enough in Today’s Market.
Dated: October 5 2021
In today’s real estate market, buyers shouldn’t shop for a home with the expectation they’ll be able to negotiate a lower sales price, those days are gone for now. In a typical housing market, buyers try to determine how much less than the asking price they can offer and still get the home. From there, the buyer and seller typically negotiate and agree on a revised price somewhere in the middle.
Things Are Different Today.
Today’s housing market is anything but normal. According to the National Association of Realtors (NAR), homes today are:
- Receiving an average of 3.8 offers
- Selling in just 17 days
Homes selling quickly and receiving multiple offers highlights how competitive the housing market is right now. This is due, in large part, to the low supply of homes for sale. Low supply and high demand mean homes often sell for more than the asking price. In some cases, they sell for a lot more.
Selma Hepp, Deputy Chief Economist at CoreLogic, explains how these stats can impact buyers: “The imbalance between robust demand and dismal availability of for-sale homes has led to a continual bidding over asking prices, which reached record levels in recent months. Now, almost 6 in 10 homes listed are selling over the asking price.”
You May Need to Rethink How You Look at a Home’s Asking Price
Understand an Appraisal Gap Can Happen
Because of today’s home price appreciation and the auction-like atmosphere in the selling process, appraisal gaps – the gap between the price of your contract and the appraisal for the house – are more frequent.
According to data from CoreLogic: “Beginning in January 2020, nationally, 7% of purchase transactions had a contract price above the appraisal, but by May 2021, the frequency had increased to 19% of purchase transactions.”
When this happens, your lender won’t loan you more than the home’s appraised value, and the seller may ask you to make up the difference out of pocket. Buyers in today’s market need to be prepared for this possibility. Know your budget, know what you can afford, and work with a trusted advisor who can offer expert advice along the way.
Bidding wars and today’s auction-like atmosphere mean buyers need to rethink how they look at the asking price of a home. Work with a real estate professional who can advise you on the current market and help determine what the market value is on your dream home.
Source: Keeping Current Matters
Born and raised in Waltham but a long-time resident of Burlington, Brenda has been with EXIT Premier for nearly two decades, since our beginning in 2001. Dedicated to family and fun, but when it comes....
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