1. Make a strong offer, and do not be afraid to overbid, if the home is worth it. Forget about the list price. Too many people get hung up on this. If the home is listed for $120,000, and you know based on prior experience, and your Realtor has told you the home is worth $135,000, place an offer of $137,000 or higher. That is only if you truly want the home. Our current market is not for the bargain hunter, if you want a home, fight for it.
2. Do not "overbid" on a home. I know this sounds contradictory, but follow me. If a home is listed, and worth $120,000, and in a desperate act, you place an offer of $160,000, in hopes of just getting a home. More than likely your offer will be rejected, (unless your paying in cash then spend however much you want). The seller knows that the home will not appraise, and unless you can come up with the difference between the appraisal, and your offer, you will not be able to get financing. And at this point the seller would either have to lower their price,Â or put the home back on the market, and hope for a better offer. But the real thorn in the side here is if you were using an FHA loan, that appraisal would stay with the property for 6 months, and any other FHA buyers would have to use that appraisal. But an appraisal is an appraisal, and that is what the seller should sell for, right? Yes, but an appraiser that sees an offer come in 30% higher than market value, will probably appraise the home at list price, but if you had an offer that came at say $126,000-$128,000 (6% of list), the appraiser may find a way to justify that value.
3. If you have a good Agent, that has their finger on the pulse of this market, Listen To Them. Trust your Agent, and if you do not, get a new one. An Agent that knows how to negotiate in this market, and can help you come up with creative ways to make your offer stronger, is priceless.
This is an extremely tough time to buy a home, but by far it is the best. Mortgage payments are can be as low as 60% of the cost to rent. Mortgage payment of $800/month, and the same home would rent for $1,200/month
If you would like any other ideas on making a strong offer, or if you need a good Agent please contact me. My team has the resources to get you the home you desire, and deserve. Please call if you have any questions.