I have often won in a bidding process when I am not the highest price!!!
The inventory for good homes is limited so you have to decide how much you like the home, and what is the true value to you.
If you need help in the future, please feel free to call.
John Forsyth HomeSmart Elite Group
Ask yourself if you will be crushed if you lose the house if you do not step up. The analysis of comps guides us rationally, but there is an emotional side that comes into play as well. Only you can answer the question really. If this is your home, then talk to your mortgage person about what the addtional amount necessary to secure it means to you monthly and over 30 years, and then make your decision.
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And then, with only limited information, we are supposed to advise you how much to bid, right?
And, you haven't done a CMA to know how much the house is worth, right?
And we're supposed to tell you your right, right?
You are right!
You find yourself in a situation which is increasingly common on properties in some parts of Arizona. Here in Casa Grande, the best properties, when priced attractively, almost always have more than one offer on them. So, although you mention 'letting this one go', bear in mind any house you like will probably have other interested buyers. You're pretty likely to find yourself in a multiple offer situation if you move on to another home, too.
So, what's the answer? If you want to buy a home, expect there to be other offers, and set your strategy now, with your Realtor.
Since that's the case with this home, you have a few options at this point:
1 - Stick with your current offer, let the chips fall where they may
2 - Change price and / or terms on your current offer
3 - Walk away
The last option is probably counter-productive. You might already be the highest on the table, and the other bidders might also be considering backing out.
Let's say you decide to amend your offer by price. Ask yourself honestly, what is the highest price you'd be prepared to pay for this home? Have your agent pull the local comps and go through them with you, in detail. At what price would you feel you'd lost out if you heard the other buyer got it for that? Don't miss out on a great home for a couple of thousand dollars, if you really feel this is 'the one'.
Another way to think of it is to ask yourself, if you saw the home listed at $x price, would you have offered that price? If the answer is no, then maybe you don't want to bid that high. If the answer is yes, or if this home has some really unique features you don't think you'll find somewhere else (for instance, it's located next to your brother's home, it's a one-in-a-million character home, your wife will divorce you if you don't get it, and so on), then consider going up a little, to the maximum you feel comfortable with.
You ask whether people regret paying the extra $5k or $10k, and it really depends on the individual and how they came up with their offer. Bear in mind that many buyers who 'win' that bid, far from feeling exulted, start to question themselves. Did they pay too much? How much did they over-bid by? Should they cancel and look for something lower-priced? This is natural, but it's also counter-productive. If you put yourself in a position whereby you're bummed if you 'lost out', and you're nauseous if you 'won', then you didn't fix a price in your mind that you felt good about in the first place.
The golden rule is - don't pay more than market value UNLESS there is something about that home that gives it special value to you. Today's market is unforgiving - don't get caught up in bidders' frenzy. Be pragmatic, consult with your agent, make sure you understand the comps, and come up with a value that you know you will feel good about if you win, and okay with if someone goes higher, because you know you'd gone to your max.
If you don't want to increase your price, discuss with your agent how you could strengthen your offer in other areas. A good agent should have a menu of strategies for you to use to win in a multi-offer scenario, and I've had financed clients of mine beat out cash buyers, and low(ish) ballers beat out high bidders. The key is to put yourself in the sellers' shoes: they (usually) want the highest possible net, the fewest hassles, and the lowest chance of a cancellation. If you're serious about the home, you can make your offer better than a higher priced one with the right moves in the seller's favor.
I hope this helps. Please let me know if there is anything I could do to assist you, and good luck with whatever you decide to do :)
RE/MAX Casa Grande Yost Realty
The highest number doesn't always get the house!
On the other hand . . .
There are two offers on the table. You're one of them. Your offer might already be the highest--there's a 50/50 chance of that. The other party might not want to go any higher. Or the other party might be, say, $5,000 under you and will increase that offer by $4,000. You're still the highest. You don't want to end up bidding against yourself.
One final consideration: It's not just the highest price. It's also any terms, conditions, and contingencies you attach to your offer. (And those from the other interested party.) When there are two close offers, it's not always the highest one that "wins." It's often the more solid one. So: Take a look at other elements of your offer, too. Are there any things you can safely modify to strengthen your offer? Your agent can help you with that strategy.
Hope that helps.
analyze LISTING PRICE, for a second:
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.
Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”
Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)
We have found that extremely often, the LISTING PRICE that is set on SHORTSALES and REO’s are not determined, nor even discussed with the Bank: The banks play their cards very close to the vest, they will not tell the Listing Agents any more than they have to; they will not give us their lower limits. So usually, the LISTING PRICE on a distressed property is a number taken out of the air.
If you are considering a property, have a Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. If you look at enough CMA’s, you will see the trends.
So, the point is; if you didn't do a good analysis of the MARKET VALUE, then everything is basis on moveable numbers.
Please get your own Agent and have him do a CMA
Typically when negotiating on a home, buyers will go in low with the expectation that the sellers will counter offer with a higher number. If this is your scenario, offer what you feel the home is ultimately worth and not a penny more. If you're already at what you think the home is worth, then it's best to walk away.
Just remember, the home will have to appraise for the sale price for you to get a loan.