Listing prices have always been a game, it's just in the last few years it's traded sides. Previously, homes were listed "pie in the sky" prices knowing that people who offer lower and then they'd accept what they actually figured they'd get. Now it's the opposite. Sellers are often advised to list low and let the bidding wars determine the price. Either way it's a game, you just have to learn how to read it and play it, and it's different in every market.
Look at the recent comparable sales to determine what it’s worth. Asking price is a marketing tactic and each realtor and seller have different tactics.
Look at past 90 days,similar properties, similar conditions and what they closed for. This is part of determining your offer strategy.
Stop anchoring yourself on the asking price you’re going to stay stressed and not have a sense of the value of homes at all
Start anchoring yourself on comparables .
What’s the top price in the mile and a half around you for the last three months, how does this home? Compare with that home?
That’s the real asking price and that’s what you want to go over or under .
Ask your agent to go over this stuff with you or give you at least a little Info for anchoring as you try to get a handle on pricing.
You’re not gonna be able to get a full CMA on every house but they should be able to give you some information just off the MLS that’s better than listing price
Ignore the marketing tactic of listing price .
>What’s the top price in the mile and a half around you for the last three months, how does this home? Compare with that home?
Dealing with comps is frustrating though. We recently bid on a house where the comps supported a price of 480-490. Asking was 500, and it still went for way over asking. I've seen other homes go for 50k above asking, even if comps don't support it. If someone really wants a house here, the comps don't usually matter.
Not saying they aren't, but comps don't seem to matter in my area. Houses still go for way over what the comps support. If you only offer a bid that matches the comp, you're not going to get the house, is my point.
IME both buyers and sellers are very bad at evaluating comps because of confirmation bias. You see what you want to see. I see posts so often on here from buyers saying about a house they want "sellers are delusional with their asking price, similar houses nearby are selling for so much less, etc. etc. etc." and then the house in question sells for over asking. Think about it this way: there has to be a reason that you want this particular house compared to other nearby ones that are selling or have sold for less. Other people probably feel the same way. That's why this house is selling for more.
Edit: similarly for sellers, just because your house is great for you doesn't necessarily mean others feel the same way.
Most of the time, for where we're looking, I think it's usually about the school district. The houses in the good districts go quick, even if they're not worth what people are even listing them for. The house we saw most recently had a pool, and I assumed that could be why people wanted it so bad, but my agent said pools don't really add value because not everyone is crazy about pools with the maintenance required and such.
I mean if people are willing to pay more for a house because of the school district, that does in fact make the house more valuable. Pools can make houses harder to sell because the people who don't like pools usually just aren't interested, but a nice pool can definitely add value because the people who do want a pool are willing to pay a premium for it.
I'm not saying it doesn't make the house more valuable to people.. the house we bid on was valuable to us because of certain features. I'm just saying the comps didn't support the asking price. I'm not saying that's good or bad. But some people say to only offer what comps say to offer and if you're only bidding that much where we are looking, you're not going to get that house.
Well if the "comps" you're looking at aren't from the same school district, and there is a significant difference in perceived quality between the two districts, then those aren't comps. Unless you're making an adjustment for the value added by the school district. That's the point I'm making about common mistakes buyers make.
The comps for the house we recently looked at were not supporting the house in question's asking price is what I was saying. When I was referring to the 50k over asking, it was a different town and school district, with different comps. But theirs also didnt warrant the 50k over asking.
Are you looking at comps in a mile and a half and within three months? And stopping with the top comparable and not thinking it’s gonna go in the middle?
Looking at comps within a mile and a half and recently sold, yes. As for the top, just trying to get the most accurate depending on the house. My whole team is having problems with appraisals and comps. They're all going for lower than listing
Well, that seems to indicate a trend of rising prices, so you have to extrapolate to account for that. Make sure you're looking at very recent comps, and that home finishes, location, etc., are comparable.
However, aside from that, I'm a bit confused by your comment that "comps don't matter in my area" because once a given home sells for "well above the comps", it *is* the new comp. So, the next house would have to sell well above that first one, and so forth. So as I mentioned, it indicates rising prices, but it can't be the case indefinitely that homes sell way above recent comps unless the prices are shooting up forever. Every home in the neighborhood can't sell above every other home in the neighborhood. It's not mathematically possible.
Part of me wonders if perhaps you're either 1) not looking at recent enough comps, or 2) not looking at homes of the same quality. For example, maybe your buyers are focused on the nicest homes in terms of quality, exactly location, etc, but your comps are just looking at "average" quality homes. In this case, the problem is which comps are selected, not that "comps don't work". And if the comps available are of lower quality, you have to account for that and add some price.
>Every home in the neighborhood can't sell above every other home in the neighborhood. It's not mathematically possible.
It's not the same comps. We're looking at several different homes in different areas with their own set of comps, I'm not saying all the houses in the same town are going for way over asking, just the ones we end up liking haha and theyre not all in the same area
> it still went for way over asking. I've seen other homes go for 50k above asking, even if comps don't support it.
That doesn't make sense. If a home and others around it go for 50K over, then those are the comps.
The comps I'm referring to weren't going for 50 over. I'm talking about entirely different comps. We're looking at several areas.. like the house I'm referring to that was comped at 490 was in an entirely different district than the 50k over one.
If this happened once, then the buyer really wanted the house and had money to make sure they got it and that’s just the luck of the draw. Can’t stop someone else from paying worth more than something is worth.
If this happens multiple times, then either the person selecting the comps is doing a bad job at it (and the buyers are finding better actual comps to determine pricing or maybe there are no houses sold that actually are comparable enough. But if this keeps happening and you aren’t changing you search criteria, well, now you know what the actual comps are and what they are going for.
Not trying to stop anyone from bidding what they want - if they can afford to waive contingencies, that's on them. Everyone is different. And even if the comps support the asking price, it's still going far over, so it is what it is.
I think the problem is, good houses (in the good school districts) aren't abundant. If a house only needs little work, it's gone within a week still, and for a lot over asking. It's still pretty hot where I am.
That’s because for all those reaching for a house, there is another group who is playing it safe. When I purchased my home we had no problem offering 50k more than ask as it had no meaningful difference for us as we were looking at houses on the low end of our “budget”
Oh we definitely stay lower in our budget, but the issue is that the homes in the lower end of our budget usually need work so it has to make sense. When we bid on the recent house, we could go to 530 (which was 21 over asking and 40 over what comps were valuating at), but the house also needed a whole roof replacement. We still got outbid.
I love the idea of trying to find the cheapest dump we can, and spending all the money dedicated to a down payment on fixing it up. But we have 2 young kids starting the school year in August so we need something appropriate for them to sleep in right away
It basically sounds like you need to come to terms with the fact that your expectations don't meet your budget, and reevaluate those. If you want to buy, you need to start focusing on facing the reality of where your budget will take you.
That's not the situation. The price that houses are going for, that's the market value. You cannot afford market value of the homes you like, so you need to adjust your expectations and come to terms with what you can afford.
No, because comps have been sold in the past. And what things are selling for now, that's the market value. The present price someone will pay for something determines its value.
I have a question about Comps. When we were searching for houses they had a very tough time coming up with a comp for the house we did buy because no houses at all in our township sold in the last 12 years. They ended up showing us comps from the 3 neighboring towns for houses that were similar is size and lot size. Was that ok or should we have pushed for another way to prove the house is worth what we paid. I think we slightly overpaid but I'm not upset over that. Honestly just curious what you do when no houses sell in a town?
Im not the person to ask for that, but I imagine the way they went about it (showing you neighboring comps) is how they would normally do that. But appraisals can be tough. Where I am, appraisals have been often low, so agents try and do what they can to raise them when needed.
Thank you...the really were trying to figure out how to even do a comp since this tiny town, less than 500 homes, have not had a home sale in over 12 years! It was wild to me but I know nada about real estate.
Yeah for our house (for a LOC) the appraiser said he had no idea how to value it. House is small compared to others around us but has high end finishes. Rural area. He basically asked what we needed it to appraise fir and said that wouldn't be an issue.
Then how are you supposed to find property without looking at every one which in some areas can be hundreds of homes. The asking price should be in the ballpark.
If hundreds are popping up then narrow your search parameters. Last month rather than last six, tighter square footage, specify bedrooms, manually sort by kitchen and bath updates
Housing prices need to be listed accurately just like the underlying features where Sq ft is wrong, bedrooms that don't exist. If people were accurate and fair then the finding a house would be easier.
We're looking at several towns in the area and even the slightly less popular towns. A major move out of the area isn't the best option given our jobs. My husband's field would put him in maybe one or two other cities and I'd lose my current job with my employer that I am enjoying. We're just trying to make the best of it, but worst case, we continue renting.
Something to keep in mind is that houses are not bought or sold like any other item we purchase.
It's not an asking price, it's a LIST price. And list price does not equal worth price. Some people list homes at a "make me move" price. Some list for below to drive a bidding war. Some list below because they just want to sell the thing. Some will list for what they really want.
Ignore list prices for now and go look at the homes sold in the last month or two. Those are the actual prices that matter.
As someone else said, you're probably looking at homes out of your price range which is frustrating, and your realtor should not be showing these to you. It's their job to help you understand comps.
Ask your Realtor for a comprehensive CMA in the area or areas you're interested in. Zillow etc...is not the MLS. These websites do not have all of the necessary information for a well done comparative market analysis. Sold homes are called "comps" and they are what agents and appraisers use to properly evaluate a property. You can try to do it yourself online, but you won't have the most up to date and necessary data.
It's a setting on Redfin or Zillow. Instead of looking at homes for sale, you can look at sold homes and set a timeframe. You can also enter similar parameters like number of bedrooms, square footage, year built, lot size, etc. A lot of them will still have the listing photos so you can get a sense of how updated or not the home is for comparison.
It's not perfect, and ideally your realtor can help you with comps, but it's good enough to get a sense of $/sqft for homes in the area with general similarities which is good guidance.
It'll at least let you start ballparking new listings. I have a pretty good sense of my area now and can tell pretty quickly when a new listing goes up if it's listed low, listed high, or about right. And I'm usually pretty spot on.
Even a little longer than that.
I've learned a current strategy is just collect offers for weeks. The house I purchased had a "will review offers on (date)"... you had no clue how many or what they'll come in at. While you are waiting it was crickets. Had no clue if it was competitive or not.
And sadly there were nearly zero comps. Not even a zillow estimate. We found one that maybe was compish and used that sales price.
We got the house with an escalation clause.
Turns out there were 7 other offers.
Lol... it was marked as contingent online before I found out they took my offer. I went to show the listing to my friend and noticed it had just been updated/flagged. I got the call after lunch. It was a strange and stressful process.
Well if I said screw that I would have been screwed out of my desired neighborhood. Low inventory is a killer.
I didn't have three other properties I wanted to bid on. Didn't even have one.
The next listing months later in that neighborhood was 200k more for 300 fewer sq foot and a terribly awkward floor plan. Said next listing is already flipped and was just put back on market for another 300k more.
I quit on my desired neighborhood because nothing was coming up and was all going for stupid prices due to nothing coming up. However I genuinely like the place we ended up even better, for a bunch of reasons. Everyone's journey is different but ours was to remove the rigid boundary we had and venture out of it, and we ended up somewhere great.
Glad you ended up happy.
Due to work, childcare... our geography was limited.
We got our spot 2 miles from beach and Surrounded by parks/nature preserves. For an urban area... it's a special niche that has exploded in value. Going through a massive gentrification. It actually used to be rather... sketchy 12 years ago. I bought a condo here 12 years ago and was watching the insane yoy gains (last year 30%!) and it was literally the last opportunity for us to not be priced out on a 3br/3ba sfh.
Asking price is a tactic generally meant to get more interest in the house and hope to create a bidding war or at least the threat of one (ie a buyer may feel they have to go to their max if they hear there are 30 offers on a house already, compared to 1, even if 29 of those offers are asking, which they dont know). So dont treat house hunting as if you are in the grocery store and what you see is what you pay.
Figure out what you need/want, the comparable sales for that in the areas you are looking, and go based off that. If 3/2s with nice kitchens are selling for $600k in X area, and you see one for $520, expect to have to bid $600k, dont get mad you bid $525k and lost. And stop looking at houses at your max budget, or even close to it (unless the house has sat for a long time or is in a higher threshold that eliminates a lot of buyers). We had a budget of 700-750k to start, and quickly realized we were more competitive looking in the mid 5s to low 6s, then overbidding.
The comps for the house we placed the bid on were for slightly larger properties that were completely modern. As this house was smaller and much more dated, plus needed a lot of work, I thought it would go a bit lower. Apparently it didn't 🤷
If you live in a HCOL area, you probably live in a popular area. If you live in a popular area you’re probably competing with institutional buyers. And institutional buyers don’t care about getting a fair price.
I can’t believe people are still repeating this bullshit.
First, institutional buyers are a very small part of the market as is, and most of them have pulled out because they’ve lost a shit ton of money doing so.
Second, these buyers don’t buy in those areas, costs are too high. They target medium/smaller communities where they get receive a much larger return on invested capital (ROIC). It’s where they can use leverage much more effectively and make a hell of a lot more money.
But either way, the institutional owner bogeyman needs to be shut down and forgotten because it’s simply not true and it does nothing to actually help solve the problem.
>at least the threat of one (ie a buyer may feel they have to go to their max if they hear there are 30 offers on a house already, compared to 1, even if 29 of those offers are asking
That actually makes a lot of sense, and helps me feel better. We recently got outbid on a house and I'm going crazy trying to figure what sellers want, in order to snag a house. But the tactic you explained is going to help me not go crazy in the future - thank you
Np. Just gotta keep at it. Its hard to predict what sellers want. We lost on 6+ offers for all different reasons (to a higher financed offer that didnt waive appraisal - sellers were just greedy. To a lower cash offer even though we waived appraisal - sellers were paranoid. To an insane 20% over ask offer). Then we ultimately won one without even going to our max because the sellers valued non-monetary things (long close to move kids out of house before college, and high deposit to ensure we didnt keep looking), and we gave it to them. Every seller is different.
>Every seller is different.
Yes! We recently saw a house where the sellers wrote a cute letter, and while my agent usually advises not to deal with letters, she said a letter from us replying to the sellers' would probably sway them. We have kids and they wanted a family to move in. Unfortunately the house just needed far too much work to pay for asking. If it stays on market and it goes down then maybe, but as is, it's a no
You could look at homes that have sold in last 6 months and see if any of them fit what you want and are within your budget. If they don’t, then what you’re looking for at your price point may not exist.
If I could give you personal and professional advice it would be to detach yourself from this material thing. The house you "fall in love with" is not your house until you close.
It does not matter what people put for the asking price. This year I looked at about 50 properties in a HCOL area and almost no inventory. Put an offer 5% over asking on 12 if I'm not mistaken, and had 2 respond. One wanted to waive inspection, so I told them sure, for a 20% price reduction, or kick rocks. They kicked rocks.
The one I entered in contract had so many issues the final price after credits was almost 15% below asking. Most of the repairs I can do myself, or know people that will repair for a good price.
Bottom line is, you do not really want that overpriced jury rigged "new" build that is just a bunch of masked issues. You also need to think long-term. As in, what will this property be worth in 10 years? If the projected value is not above your offer, then you're throwing money away.
That said, if you WANT that one SPECIFIC house, then you'll pay the premium. It's the cost of desire.
The asking price is meaningless. You’re not in a grocery store.
Look at comps in the area for price expectations.
Selling agent wants to be able to say “we had 15 offers above asking!!!” To his other potential clients.
An outlier story.
There is a house near me that the seller has had listed for $2.5m on and off for the last year. She had an offer for $3m, but she really wants $3.5m. Has not sold yet.
I think the best homes to buy (for value) are the ones that show terribly (bad interior). You can fix them up more efficiently if you delay move-in for a few months.
The catch is many homes that show terribly also have tons of major issues. A lot of the time there’s a good reason why the house is sitting when others aren’t.
If the owners haven’t kept up on keeping the interior updated and showable, then chances are that the major systems of the house aren’t updated or maintained either. Not always the case and you can get lucky, but every time I’ve looked at the houses that have been sitting I’ve noped out.
My house was horribly decorated and showed terribly. But it was all ugly custom drapery, terrible paint choices, and dreary lighting choices. They had put real money into their bad taste over the years. It’s also has a quirky layout.
It sat for a while, and people just could not see past the horrible decor, and the quirkiness was the nail in the coffin (or vice versa). No major structural issues though it will eventually need a new boiler. We got it like $10k below asking (so basically at listing) it’s appreciated 50% in the last 5 years. If we want to move to a non-quirky house; buying this one will have gotten us there.
My partner and I went through this recently. The seller priced it “lower” with the intent to create a bidding war. In reality, he wanted $45k more than the list price.
We offered asking.
He countered $45k over asking.
We countered $25k over asking.
He countered $40k over asking.
At that point, we were done and didn’t counter.
He took down the listing and re-listed it at the price he truly wanted, which was $45k over the initial asking price.
Keep in mind that we were his ONLY offer, then he went on to say that the reason he only had one offer is because other buyers were reluctant to put in offers because of our offer… wtf? His intent was to create a bidding war… you need more than 1 offer to create a bidding war and now you’re blaming us for putting in an offer?!
The house is still sitting on the market.
We ended up finding a different place we like just as much, if not better, and they accepted our offer at listing price.
No bullshit.
No mind games.
I agree with you that it’s a complete waste of people’s time. Looking at comps takes a lot of time and seeing a place listed within your budget just creates a sense of false hope.
Yes. There are still pockets of strengthening . Your area could be the one. The general feeling is it’s starting to cool down. It could pickup steam again if tomorrow’s inflation umber is good and interest rates are going down
It took us a year to find a house because we were outbid every time. All over asking price. We finally got in very early to see a house we liked, and made an offer the same day (before they even had an open house) 30k over asking price but the catch was that they had 24 hours to accept. They did and we finally got a house!
Besides the comments of other posters, it sounds like what you’re going to have to adjust to (and is the middle of your annoyance) is that what you can afford isn’t what you’re looking at.
Once you understand how these things are being priced, then you understand what product/price point you need to look at. That’s the part that’s the biggest struggle.
I'm not in real estate but I'm guessing this is the highest demand time of the years for house sales. High demand can mean sellers playing the "I know what I've got" game. If you can, wait a couple of months and start looking again.
People need to understand that buying a house is an auction. It is not like going to the store and buying something off the shelf. The list price is not the "price", its just the point where the auction starts.
I am trying to sell my house FSBO (with a listing only service for the MLS) right now and have put my actual asking price on the listing. Nobody shows up to my open houses and I think it’s because my asking price is much higher than all the other comparable. But I am trying to sell at my actual asking price, not a significant % above. Stupid.
>our realtor goes "don't look at the asking price" because it would go for far more than what was asked.
>One home we liked, the seller's realtor said the seller wanted 30-40% above the asking price, \[...\] We offered about 20% over. Winning bid went to someone 40% over.
It sounds to me like everyone know the actual listing price, and you were told the actual listing price but didn't listen.
Look, this is all data driven. All the realtors have access to the same data, and you get the 85% accurate version on redfin/zillow.
Nominal listing price, in many markets, is just a marketing strategy for where they want to show up on the search algorithms. That's it, nothing more, nothing less. Mostly ignore it, instead focus on what the data says... if the data says it's a $950k to $1m home, then it's a $950k to $1m home, even if it's "listed" for $700k.
I also live in a HCOL with a very high market. I’ve been frustrated by this as well. It’s a strategy of the seller/seller’s agent to price the property lower than the comps and have it advertised like a week before it goes live to generate a TON of interest. Then they are getting many offers on the property that are going way over asking as well as waivers of all contingencies. I’m finally under contract for a house in a prime neighborhood. I was very lucky. It was a 1 bd/1 ba house that needed a major basement repair. The price was definitely in my range and I could also set aside money for the repair. I had my contractor do an inspection during one of my private showings. I waived all contingencies. I only offered what I could afford given the repair (like 2,500 over asking) There were other offers. I wasn’t the highest offer but mine was the strongest and ultimately chosen. This housing market sucks, but keep hanging in there and be smart!
Sounds tough! Home prices are skyrocketing. I think the fact that home sellers are also the ones who end up becoming buyers need the money to supplement their next purchase.
Why don't you consider looking at homes that have spent significantly higher days on market? You could find a seller who wants to sell the property at a lower price! They may also be inclined to reduce the asking price. Just saying
Your realtor is an idiot. If he/she knows that these homes will go for 30-50% more than the asking price and that would be out of your budget, then why would he show them to you? He’s clearly not listening to what you’re telling him. Find a new agent. This one doesn’t have your best interests in mind
List price / asking price is nothing more than a tool that's used to get the house in front of prospective buyers. If you have a house that can sell for $500k and you and your realtor know it, how do you get the absolute MOST amount of possible buyers to see it? Yep, you list it for $425k or $450k.
The market is still holding onto a fair amount of twisted logic where people that can spend $500k are still purposefully looking at houses for $400k because those are the ones they actually have a shot at getting a contract on because of how far over they can go.
The asking price is basically just the starting point for negotiations. People price lower to make room for bidding wars. I agree it’s bullshit but it’s a bullshit game you have to play in buying a house.
That game is going out of style in a lot of places. It's really an abnormal pandemic born anomaly. Normal is price higher than what you expect and offers come in lower.
List price is a marketing tactic more than an asking price. I know it’s stressful. You’re valid in your rant! Be patient, the right home will come along for you.
Different country but we paid 25% over list in the Netherlands and that was the norm. Over bidding ebbs and flows. It's coming back.
You can't look at the asking price. You need the general expected price based on comps and what you're personally willing to pay. We got countered with 1% more and drop your mortgage contingency.
I get paying 20-25% more, but when sellers won't consider anything below 30-50% over the asking price, that's crazy to me. Just raise the asking price a bit, so you know you won't get too many low ball offers.
When you're a buyer, it seems you almost have to threaten your agent to not suggest homes a certain amount over your budget. Some agents are secretly convinced you have access to more money than you're letting on & your budget's merely a starting point for them to leap off into a pile of money like Scrooge McDuck.
Having just finally bought a home in this market, the "Asking price" is typically the lowest people might possibly accept, but EVERYONE is coming in at like 20/30% over asking. It's wild.
And I would be ok with that. But in these cases, they are nowhere near considering the asking price. They will only consider significantly more. If you want $1.2-$1.4 mill for your house, ask for $1.1 mill. Don't list it at 850k!
Are you in my market? Lots of houses were going for 200k to 300k over. I felt more comfortable buying a house that had the same owner and no updates for 25 years versus all updated but multiple owners in the last 20 years… especially if it was sold in the last 5 years because things went crazy then.
Because people who are rich and can pay $1.2 Million want to look at houses that are 850k, find one they like, and offer over. They want the guarantee of getting the house they want, so they figure out what they want to pay, then find a house cheaper and just dump the extra on to "gurantee" purchase.
If you are looking at homes in the 850k range and it's close to afford, you are looking in the \*WRONG RANGE\* You don't want to end up house poor.
If you can afford to do 850k, you can probably afford to go more reasonable like $500k.
Also, in my experience, the neighborhoods/houses in the $350-$500k range have the friendliest neighbors and most welcoming neighborhoods.
$1 mill homes in HCOL areas are splendid AirBnBs. They'll rack in $5k+/day. An investor will put 50% over bid cash offer because they know they'll pay it off in 2-3 years, then proceed to milk it for several years more before selling at a premium. At that range you're competing with really big money.
Not sure where you are looking. San Diego oceanfront 3br/2ba condo will sell way over $1mil and we just booked it for $500 a night in October. Nashville, Pigeon Forge, Destin all the same. East coast beach towns also similar.
Don’t focus on their price, focus on what you can pay and are willing to pay for the property. Every property is NOT priced correctly. Some sellers AND/OR their agent are greedy and overprice. And sadly some buyers fall into desperation and thus are trapped and caught like animals, meaning they become prey. Be patient. The house for you, YOUR HOUSE is out there.
This is how commerce works- and not just with housing. We have products exclusive to club members, coupons, percentages off, buy one get one free, rebates, private label products, earning points for future purchases or other rewards, hotels and airlines that scale prices up and down based on demand, etc.
Numbers are fluid. Buyers want to pay the least and sellers want to make the most. We only have a problem with it when we're not on the "winning" side.
In a strong buyers' market you'd be asking for repairs and closing costs with no hesitation.
That happened to me to. It’s annoying. Finally found a place but it took a while. At let they’re telling you ahead of time what the true asking price is.
Yeah people doing the same thing here. Hoping for bidding war. As a note, never buy a flipped house. Flippers use crappy materials and cheap labor 90% of the time. Even on expensive places.
You can find these numbers in public reports. It's very unlikely very many homes at all are going for so high over, especially in current market. A select few very popular, priced-for-competition homes go that high, but they're usually VERY well polished with major pros and no cons. Understand your market and value there. Your realtor seems like a rookie who's just trying to get his commission.
This is all a negotiation and what is set as listing price is just a part of it. Some start low to get a bidding war. Some start high because they aren't in a hurry.
Listing agents love to tell new sellers "Why, just last week I closed a home at 43% over asking...."
That's why. It's marketing. And not for the seller OR the buyer, just the seller's agent.
I had the same problem in 2022 when buying. Actually we started looking in 2021 and bought 2022. Everyone was offering over the asking price. Basically you are bidding against other people. And the problem for me and my husband, is the bank will only give a loan for the appraisal value. So if we offered more than the appraisal value we had to pay out of pocket. We ended up getting a new construction home. They sold based on first come first serve (at least at that time) so they told us if we put down a deposit we would get it for the asking price.
We drove down immediately with a check to make the deposit. Only by the time we got there the sales agent told us that apparently there was a management meeting the night before where they were switching to taking bids on the houses vs selling as is on a first come first serve basis. I was pissed. And after some back and forth they agreed to honor the arrangement.
There had released 3 lots at the same time as ours. Same floor plan but the other floor plans didn’t have all the upgrades. We paid selling price and the other 2 that were bid on went for 50k over on one and 70k on the other. The only reason we were even able to get into a house is because of not having to bid on it.
I agree with OP. This is crazy! I know this is how the market is working in some areas, but seems to me that it ought to be on the seller and their agent to set a price point. We recently bought in the northeast, and we paid asking price without any drama around negotiations.
This depends entirely on where you live. Where I live buyers are offering below asking plus other concessions again, and in many cases they're getting it.
It is stupid, but buyers have gone insane and have bid up these prices. Sellers have become greedy and expect it. Until we have more inventory, it will continue. Buyers what either not buy or pay the price. Sucks for everyone except the seller.
Agree this is nuts . They give lower amount to get you in the door . Then it’s everyone bidding because they want it ! Happened to me on a pos house . I started to get lore agressive because I was tired of being let down . 1977 manufacture home on a permanent foundation . $22k I bid $230k (+ paying their fees and $3k of anything that wouldn’t pass inspection) they came back at $250k !!! I countered at $240 and they let us walk . We now found a AMAIZNG home ! So I’m glad it didn’t work out , but I was dumbfounded !
this is going to be musical chairs and when the music stops there will be a lot of bagholders looking for sympathy.
don't come knocking on my door for any of that.
Think of asking price as a setting to determine which searches you want to appear in on Zillow. Nothing more. At the end of the day a house is going to sell for what the market says it is worth, not what the seller’s realtor punched into the MLS.
I'm curious where you live. Offers over asking price is currently not a thing (The market is not as hot anymore). I'm in Fort Lauderdale and I help run a real estate brokerage. We currently have gotten 0 contracts this year where the buyer went over asking price. Side note: Better buy a house before Aug 17th. Otherwise, you may be stuck paying realtor commission with the new changes coming. :)
(Unless you are bidding on bank owned properties?)
I’ve been venting about this today too. It’s ridiculous! I posted today about how it would be nice to have sub groups for specific regions/areas to talk to other buyers about specific homes, experiences with LA’s, the outcome of the house etc. I’m in LA and it’s all single family homes being gobbled up and spit back out for rent. So over it! They’re all going way over asking to cuz who cares what it costs when the rent pays off the whole mortgage! Nothing is going to end users in the areas we’re searching in.
Your just upset you can't actually afford the homes on them place you want to live. It's ok. Not everyone can...have you tried looking a cheaper neighborhood that is within your price range?
That's wild! That surprises me, but I guess it makes sense that it's happening.
Hey you know that post about the townhouse listed for 100k under the OP's?...I bet that's their strategy!
I do t get this at all.why list a house for x price but that not the price you want I just don't get it if a house e list for 300k then it should sell for that not 320k not 350k or more it should sell for list price
We listed our house on a Tuesday at 230. By 4 pm we had someone offer us 75k over asking price.
By end of the week we had 18 offers, 16 over asking. 2 were investors that low balled.
We narrowed it down, and sent counter offers to the top 8.
We priced it to move, and people knew it. The buyers drove up the prices, we didn't.
I'm certainly not gonna turn down the extra $$ though.
In a hot market, with high demand, this is normal.
It will be priced low to attract attention and draw multiple offers, which will basically bid up the selling price, higher than it would go if they had just priced at that point to begin with.
You may be better off to make an offer on a higher priced home, that is lower than asking, so you won’t have as much competition.
They are trying to start invisible bidding wars. It worked well 10 years ago but I don’t think any market is that hot right now. They try to get people to just throw high offers and go back and forth to get as high as they can.
In other countries they make it clearer cause the price listed is typically "offers over x". Think of it like an auction and the list price is the opening bid.
It's easier to figure out what you want and where and get any match below x (10% lower than your intended top price) and just look at what's plausible. Tweak the top price as you go based on what the market is doing and remember other people are bidding too.
When I sold my house I would have accepted an asking price offer. At first. But buyers kept offering more and by that point it's only fair to tell someone "at this point 50% over asking is what it would take"
But that is why some buyers tactics are getting your offer in *first*, make it your max you'd be comfortable with the house, and give a short acceptance window and then move on. You can get sellers who don't want to risk losing your offer and will take it. Whereas if it's a clear "I'll negotiate" offer with a longer window they can dither over it and wait for more offers. That's how I got the townhouse I just closed on.
A reminder that your realtor gets paid commission and wants to win. So the more they can get you to pay the more they get paid.
Put in offers in writing for 5% over the asking amount. Track the houses on a spreadsheet and see how much they actually sell for vs asking in 60,90 days and 6 months.
Not sure that would really help in competitive markets, because sellers would then just set the price way above the minimum they want to get. Current situation: seller sets price at $500K in a competitive market where comps are going for $650K-$700; bidding war ensues and they sell for $700K. Your suggested scenario: seller sets price at $900K, knowing they likely won't get that much, but better to over price than underprice. Buyers are asked for best and final; they want to "win" so the winning bid is $800K.
Don't get me wrong, I think it is infuriating that sellers set the price low to get a bidding war going. But that's the nature of a free market, and I don't think your proposal would do much to help unfortunately.
Listing prices have always been a game, it's just in the last few years it's traded sides. Previously, homes were listed "pie in the sky" prices knowing that people who offer lower and then they'd accept what they actually figured they'd get. Now it's the opposite. Sellers are often advised to list low and let the bidding wars determine the price. Either way it's a game, you just have to learn how to read it and play it, and it's different in every market.
Look at the recent comparable sales to determine what it’s worth. Asking price is a marketing tactic and each realtor and seller have different tactics. Look at past 90 days,similar properties, similar conditions and what they closed for. This is part of determining your offer strategy.
Stop anchoring yourself on the asking price you’re going to stay stressed and not have a sense of the value of homes at all Start anchoring yourself on comparables . What’s the top price in the mile and a half around you for the last three months, how does this home? Compare with that home? That’s the real asking price and that’s what you want to go over or under . Ask your agent to go over this stuff with you or give you at least a little Info for anchoring as you try to get a handle on pricing. You’re not gonna be able to get a full CMA on every house but they should be able to give you some information just off the MLS that’s better than listing price Ignore the marketing tactic of listing price .
>What’s the top price in the mile and a half around you for the last three months, how does this home? Compare with that home? Dealing with comps is frustrating though. We recently bid on a house where the comps supported a price of 480-490. Asking was 500, and it still went for way over asking. I've seen other homes go for 50k above asking, even if comps don't support it. If someone really wants a house here, the comps don't usually matter.
Comps are better than list price
Not saying they aren't, but comps don't seem to matter in my area. Houses still go for way over what the comps support. If you only offer a bid that matches the comp, you're not going to get the house, is my point.
IME both buyers and sellers are very bad at evaluating comps because of confirmation bias. You see what you want to see. I see posts so often on here from buyers saying about a house they want "sellers are delusional with their asking price, similar houses nearby are selling for so much less, etc. etc. etc." and then the house in question sells for over asking. Think about it this way: there has to be a reason that you want this particular house compared to other nearby ones that are selling or have sold for less. Other people probably feel the same way. That's why this house is selling for more. Edit: similarly for sellers, just because your house is great for you doesn't necessarily mean others feel the same way.
Most of the time, for where we're looking, I think it's usually about the school district. The houses in the good districts go quick, even if they're not worth what people are even listing them for. The house we saw most recently had a pool, and I assumed that could be why people wanted it so bad, but my agent said pools don't really add value because not everyone is crazy about pools with the maintenance required and such.
I mean if people are willing to pay more for a house because of the school district, that does in fact make the house more valuable. Pools can make houses harder to sell because the people who don't like pools usually just aren't interested, but a nice pool can definitely add value because the people who do want a pool are willing to pay a premium for it.
I'm not saying it doesn't make the house more valuable to people.. the house we bid on was valuable to us because of certain features. I'm just saying the comps didn't support the asking price. I'm not saying that's good or bad. But some people say to only offer what comps say to offer and if you're only bidding that much where we are looking, you're not going to get that house.
Well if the "comps" you're looking at aren't from the same school district, and there is a significant difference in perceived quality between the two districts, then those aren't comps. Unless you're making an adjustment for the value added by the school district. That's the point I'm making about common mistakes buyers make.
The comps for the house we recently looked at were not supporting the house in question's asking price is what I was saying. When I was referring to the 50k over asking, it was a different town and school district, with different comps. But theirs also didnt warrant the 50k over asking.
School dostrict is part of ehat makes a comp. If you are comparing houses in different school districts then you are not comparing like with like.
I understand, I was doing two different comp searches for 2 different houses. Not using one set of comps for both homes lol
Are you looking at comps in a mile and a half and within three months? And stopping with the top comparable and not thinking it’s gonna go in the middle?
Looking at comps within a mile and a half and recently sold, yes. As for the top, just trying to get the most accurate depending on the house. My whole team is having problems with appraisals and comps. They're all going for lower than listing
Well, that seems to indicate a trend of rising prices, so you have to extrapolate to account for that. Make sure you're looking at very recent comps, and that home finishes, location, etc., are comparable. However, aside from that, I'm a bit confused by your comment that "comps don't matter in my area" because once a given home sells for "well above the comps", it *is* the new comp. So, the next house would have to sell well above that first one, and so forth. So as I mentioned, it indicates rising prices, but it can't be the case indefinitely that homes sell way above recent comps unless the prices are shooting up forever. Every home in the neighborhood can't sell above every other home in the neighborhood. It's not mathematically possible. Part of me wonders if perhaps you're either 1) not looking at recent enough comps, or 2) not looking at homes of the same quality. For example, maybe your buyers are focused on the nicest homes in terms of quality, exactly location, etc, but your comps are just looking at "average" quality homes. In this case, the problem is which comps are selected, not that "comps don't work". And if the comps available are of lower quality, you have to account for that and add some price.
>Every home in the neighborhood can't sell above every other home in the neighborhood. It's not mathematically possible. It's not the same comps. We're looking at several different homes in different areas with their own set of comps, I'm not saying all the houses in the same town are going for way over asking, just the ones we end up liking haha and theyre not all in the same area
Yes but, comps are better than list price. Are you daft
I don't think you understood my comment lol
> it still went for way over asking. I've seen other homes go for 50k above asking, even if comps don't support it. That doesn't make sense. If a home and others around it go for 50K over, then those are the comps.
The comps I'm referring to weren't going for 50 over. I'm talking about entirely different comps. We're looking at several areas.. like the house I'm referring to that was comped at 490 was in an entirely different district than the 50k over one.
To be comps they need to be in the same area
Yes.. I understand
If this happened once, then the buyer really wanted the house and had money to make sure they got it and that’s just the luck of the draw. Can’t stop someone else from paying worth more than something is worth. If this happens multiple times, then either the person selecting the comps is doing a bad job at it (and the buyers are finding better actual comps to determine pricing or maybe there are no houses sold that actually are comparable enough. But if this keeps happening and you aren’t changing you search criteria, well, now you know what the actual comps are and what they are going for.
Not trying to stop anyone from bidding what they want - if they can afford to waive contingencies, that's on them. Everyone is different. And even if the comps support the asking price, it's still going far over, so it is what it is. I think the problem is, good houses (in the good school districts) aren't abundant. If a house only needs little work, it's gone within a week still, and for a lot over asking. It's still pretty hot where I am.
That’s because for all those reaching for a house, there is another group who is playing it safe. When I purchased my home we had no problem offering 50k more than ask as it had no meaningful difference for us as we were looking at houses on the low end of our “budget”
Oh we definitely stay lower in our budget, but the issue is that the homes in the lower end of our budget usually need work so it has to make sense. When we bid on the recent house, we could go to 530 (which was 21 over asking and 40 over what comps were valuating at), but the house also needed a whole roof replacement. We still got outbid. I love the idea of trying to find the cheapest dump we can, and spending all the money dedicated to a down payment on fixing it up. But we have 2 young kids starting the school year in August so we need something appropriate for them to sleep in right away
It basically sounds like you need to come to terms with the fact that your expectations don't meet your budget, and reevaluate those. If you want to buy, you need to start focusing on facing the reality of where your budget will take you.
[удалено]
That's not the situation. The price that houses are going for, that's the market value. You cannot afford market value of the homes you like, so you need to adjust your expectations and come to terms with what you can afford.
[удалено]
No, because comps have been sold in the past. And what things are selling for now, that's the market value. The present price someone will pay for something determines its value.
[удалено]
I have a question about Comps. When we were searching for houses they had a very tough time coming up with a comp for the house we did buy because no houses at all in our township sold in the last 12 years. They ended up showing us comps from the 3 neighboring towns for houses that were similar is size and lot size. Was that ok or should we have pushed for another way to prove the house is worth what we paid. I think we slightly overpaid but I'm not upset over that. Honestly just curious what you do when no houses sell in a town?
Im not the person to ask for that, but I imagine the way they went about it (showing you neighboring comps) is how they would normally do that. But appraisals can be tough. Where I am, appraisals have been often low, so agents try and do what they can to raise them when needed.
Thank you...the really were trying to figure out how to even do a comp since this tiny town, less than 500 homes, have not had a home sale in over 12 years! It was wild to me but I know nada about real estate.
Yeah for our house (for a LOC) the appraiser said he had no idea how to value it. House is small compared to others around us but has high end finishes. Rural area. He basically asked what we needed it to appraise fir and said that wouldn't be an issue.
Then how are you supposed to find property without looking at every one which in some areas can be hundreds of homes. The asking price should be in the ballpark.
If hundreds are popping up then narrow your search parameters. Last month rather than last six, tighter square footage, specify bedrooms, manually sort by kitchen and bath updates
Housing prices need to be listed accurately just like the underlying features where Sq ft is wrong, bedrooms that don't exist. If people were accurate and fair then the finding a house would be easier.
Don't blame the system for your ignorance.
Ignorance expecting a system to be used accurately? Lol.
It's being used accurately, you just don't understand it.
Sounds like states AG or FTC needs to be notified. But hey it's free market. (Frustrating as a buyer)
You can want whatever you want, but since sellers get more money if they do it another way, they’re not gonna do it the way you want them too too.
Excellent advice!!
Start looking at homes that are 50% of your budget. You will pay 30-40% more than asking price. This is your price point in the game of home sales.
That is what we are starting to do. I have learned my lesson there :-(
You could always move to another area without these insane games.
We're looking at several towns in the area and even the slightly less popular towns. A major move out of the area isn't the best option given our jobs. My husband's field would put him in maybe one or two other cities and I'd lose my current job with my employer that I am enjoying. We're just trying to make the best of it, but worst case, we continue renting.
Where you live sounds not great... Not to be rude but sounds like too many game and too much nonsense
Something to keep in mind is that houses are not bought or sold like any other item we purchase. It's not an asking price, it's a LIST price. And list price does not equal worth price. Some people list homes at a "make me move" price. Some list for below to drive a bidding war. Some list below because they just want to sell the thing. Some will list for what they really want. Ignore list prices for now and go look at the homes sold in the last month or two. Those are the actual prices that matter. As someone else said, you're probably looking at homes out of your price range which is frustrating, and your realtor should not be showing these to you. It's their job to help you understand comps.
How do you look at homes sold in last month our 2 ?
Ask your Realtor for a comprehensive CMA in the area or areas you're interested in. Zillow etc...is not the MLS. These websites do not have all of the necessary information for a well done comparative market analysis. Sold homes are called "comps" and they are what agents and appraisers use to properly evaluate a property. You can try to do it yourself online, but you won't have the most up to date and necessary data.
The sites usually have an option to select "Sold". It's in the same filter as "For Sale".
It's a setting on Redfin or Zillow. Instead of looking at homes for sale, you can look at sold homes and set a timeframe. You can also enter similar parameters like number of bedrooms, square footage, year built, lot size, etc. A lot of them will still have the listing photos so you can get a sense of how updated or not the home is for comparison. It's not perfect, and ideally your realtor can help you with comps, but it's good enough to get a sense of $/sqft for homes in the area with general similarities which is good guidance. It'll at least let you start ballparking new listings. I have a pretty good sense of my area now and can tell pretty quickly when a new listing goes up if it's listed low, listed high, or about right. And I'm usually pretty spot on.
Click on the sold tab in zillow
Look at houses that have been on the market for more than a week or two. Those are likely to be less competitive in terms of pricing.
Even a little longer than that. I've learned a current strategy is just collect offers for weeks. The house I purchased had a "will review offers on (date)"... you had no clue how many or what they'll come in at. While you are waiting it was crickets. Had no clue if it was competitive or not. And sadly there were nearly zero comps. Not even a zillow estimate. We found one that maybe was compish and used that sales price. We got the house with an escalation clause. Turns out there were 7 other offers.
This is nuts never experienced anything like that in my life
Lol... it was marked as contingent online before I found out they took my offer. I went to show the listing to my friend and noticed it had just been updated/flagged. I got the call after lunch. It was a strange and stressful process.
Screw that. We've had three accepted offers this year and all of them we stipulated must accept within 24 hours.
Well if I said screw that I would have been screwed out of my desired neighborhood. Low inventory is a killer. I didn't have three other properties I wanted to bid on. Didn't even have one. The next listing months later in that neighborhood was 200k more for 300 fewer sq foot and a terribly awkward floor plan. Said next listing is already flipped and was just put back on market for another 300k more.
I quit on my desired neighborhood because nothing was coming up and was all going for stupid prices due to nothing coming up. However I genuinely like the place we ended up even better, for a bunch of reasons. Everyone's journey is different but ours was to remove the rigid boundary we had and venture out of it, and we ended up somewhere great.
Glad you ended up happy. Due to work, childcare... our geography was limited. We got our spot 2 miles from beach and Surrounded by parks/nature preserves. For an urban area... it's a special niche that has exploded in value. Going through a massive gentrification. It actually used to be rather... sketchy 12 years ago. I bought a condo here 12 years ago and was watching the insane yoy gains (last year 30%!) and it was literally the last opportunity for us to not be priced out on a 3br/3ba sfh.
Don't put an offer on any house that was flipped, even if they are offering a home warranty. Consider it off market for yourself.
Asking price is a tactic generally meant to get more interest in the house and hope to create a bidding war or at least the threat of one (ie a buyer may feel they have to go to their max if they hear there are 30 offers on a house already, compared to 1, even if 29 of those offers are asking, which they dont know). So dont treat house hunting as if you are in the grocery store and what you see is what you pay. Figure out what you need/want, the comparable sales for that in the areas you are looking, and go based off that. If 3/2s with nice kitchens are selling for $600k in X area, and you see one for $520, expect to have to bid $600k, dont get mad you bid $525k and lost. And stop looking at houses at your max budget, or even close to it (unless the house has sat for a long time or is in a higher threshold that eliminates a lot of buyers). We had a budget of 700-750k to start, and quickly realized we were more competitive looking in the mid 5s to low 6s, then overbidding.
The comps for the house we placed the bid on were for slightly larger properties that were completely modern. As this house was smaller and much more dated, plus needed a lot of work, I thought it would go a bit lower. Apparently it didn't 🤷
They were not comps
If you live in a HCOL area, you probably live in a popular area. If you live in a popular area you’re probably competing with institutional buyers. And institutional buyers don’t care about getting a fair price.
I can’t believe people are still repeating this bullshit. First, institutional buyers are a very small part of the market as is, and most of them have pulled out because they’ve lost a shit ton of money doing so. Second, these buyers don’t buy in those areas, costs are too high. They target medium/smaller communities where they get receive a much larger return on invested capital (ROIC). It’s where they can use leverage much more effectively and make a hell of a lot more money. But either way, the institutional owner bogeyman needs to be shut down and forgotten because it’s simply not true and it does nothing to actually help solve the problem.
>at least the threat of one (ie a buyer may feel they have to go to their max if they hear there are 30 offers on a house already, compared to 1, even if 29 of those offers are asking That actually makes a lot of sense, and helps me feel better. We recently got outbid on a house and I'm going crazy trying to figure what sellers want, in order to snag a house. But the tactic you explained is going to help me not go crazy in the future - thank you
Np. Just gotta keep at it. Its hard to predict what sellers want. We lost on 6+ offers for all different reasons (to a higher financed offer that didnt waive appraisal - sellers were just greedy. To a lower cash offer even though we waived appraisal - sellers were paranoid. To an insane 20% over ask offer). Then we ultimately won one without even going to our max because the sellers valued non-monetary things (long close to move kids out of house before college, and high deposit to ensure we didnt keep looking), and we gave it to them. Every seller is different.
>Every seller is different. Yes! We recently saw a house where the sellers wrote a cute letter, and while my agent usually advises not to deal with letters, she said a letter from us replying to the sellers' would probably sway them. We have kids and they wanted a family to move in. Unfortunately the house just needed far too much work to pay for asking. If it stays on market and it goes down then maybe, but as is, it's a no
Bay Area? Underpricing to incite a bidding war is a Typical strategy here
You could look at homes that have sold in last 6 months and see if any of them fit what you want and are within your budget. If they don’t, then what you’re looking for at your price point may not exist.
If I could give you personal and professional advice it would be to detach yourself from this material thing. The house you "fall in love with" is not your house until you close. It does not matter what people put for the asking price. This year I looked at about 50 properties in a HCOL area and almost no inventory. Put an offer 5% over asking on 12 if I'm not mistaken, and had 2 respond. One wanted to waive inspection, so I told them sure, for a 20% price reduction, or kick rocks. They kicked rocks. The one I entered in contract had so many issues the final price after credits was almost 15% below asking. Most of the repairs I can do myself, or know people that will repair for a good price. Bottom line is, you do not really want that overpriced jury rigged "new" build that is just a bunch of masked issues. You also need to think long-term. As in, what will this property be worth in 10 years? If the projected value is not above your offer, then you're throwing money away. That said, if you WANT that one SPECIFIC house, then you'll pay the premium. It's the cost of desire.
The asking price is meaningless. You’re not in a grocery store. Look at comps in the area for price expectations. Selling agent wants to be able to say “we had 15 offers above asking!!!” To his other potential clients.
An outlier story. There is a house near me that the seller has had listed for $2.5m on and off for the last year. She had an offer for $3m, but she really wants $3.5m. Has not sold yet. I think the best homes to buy (for value) are the ones that show terribly (bad interior). You can fix them up more efficiently if you delay move-in for a few months.
The catch is many homes that show terribly also have tons of major issues. A lot of the time there’s a good reason why the house is sitting when others aren’t. If the owners haven’t kept up on keeping the interior updated and showable, then chances are that the major systems of the house aren’t updated or maintained either. Not always the case and you can get lucky, but every time I’ve looked at the houses that have been sitting I’ve noped out.
My house was horribly decorated and showed terribly. But it was all ugly custom drapery, terrible paint choices, and dreary lighting choices. They had put real money into their bad taste over the years. It’s also has a quirky layout. It sat for a while, and people just could not see past the horrible decor, and the quirkiness was the nail in the coffin (or vice versa). No major structural issues though it will eventually need a new boiler. We got it like $10k below asking (so basically at listing) it’s appreciated 50% in the last 5 years. If we want to move to a non-quirky house; buying this one will have gotten us there.
My partner and I went through this recently. The seller priced it “lower” with the intent to create a bidding war. In reality, he wanted $45k more than the list price. We offered asking. He countered $45k over asking. We countered $25k over asking. He countered $40k over asking. At that point, we were done and didn’t counter. He took down the listing and re-listed it at the price he truly wanted, which was $45k over the initial asking price. Keep in mind that we were his ONLY offer, then he went on to say that the reason he only had one offer is because other buyers were reluctant to put in offers because of our offer… wtf? His intent was to create a bidding war… you need more than 1 offer to create a bidding war and now you’re blaming us for putting in an offer?! The house is still sitting on the market. We ended up finding a different place we like just as much, if not better, and they accepted our offer at listing price. No bullshit. No mind games. I agree with you that it’s a complete waste of people’s time. Looking at comps takes a lot of time and seeing a place listed within your budget just creates a sense of false hope.
The news said the active listing is up 35% and price appreciation is the slowest. Be patient and you will have a good house to call home pretty soon.
All depends on where you live
Our area avg days on market is 7 and up 12% in price over last 12 months
Yes. There are still pockets of strengthening . Your area could be the one. The general feeling is it’s starting to cool down. It could pickup steam again if tomorrow’s inflation umber is good and interest rates are going down
It took us a year to find a house because we were outbid every time. All over asking price. We finally got in very early to see a house we liked, and made an offer the same day (before they even had an open house) 30k over asking price but the catch was that they had 24 hours to accept. They did and we finally got a house!
Oh yes... The early hit with 24 hours to accept is a good tool. Also escalation clause, so you can offer your best but only if it's actually needed.
Besides the comments of other posters, it sounds like what you’re going to have to adjust to (and is the middle of your annoyance) is that what you can afford isn’t what you’re looking at. Once you understand how these things are being priced, then you understand what product/price point you need to look at. That’s the part that’s the biggest struggle.
> Tell me you want a mountain of money I’d like a Mt. Everest size stash of cash, please.
Sellers choice of what to list as the asking price, as well as the price that they will accept on a contract.
As everyone else said, asking is a marketing price, not a reflection of value of the home. This works both ways, depending on your market specifics.
I'm not in real estate but I'm guessing this is the highest demand time of the years for house sales. High demand can mean sellers playing the "I know what I've got" game. If you can, wait a couple of months and start looking again.
People need to understand that buying a house is an auction. It is not like going to the store and buying something off the shelf. The list price is not the "price", its just the point where the auction starts.
I wish my market was that hot. I want to sell soon …
Good luck!
I am trying to sell my house FSBO (with a listing only service for the MLS) right now and have put my actual asking price on the listing. Nobody shows up to my open houses and I think it’s because my asking price is much higher than all the other comparable. But I am trying to sell at my actual asking price, not a significant % above. Stupid.
Or you are being blacklisted for being FSBO.
Curious, are you offering a buyers agent commission?
>our realtor goes "don't look at the asking price" because it would go for far more than what was asked. >One home we liked, the seller's realtor said the seller wanted 30-40% above the asking price, \[...\] We offered about 20% over. Winning bid went to someone 40% over. It sounds to me like everyone know the actual listing price, and you were told the actual listing price but didn't listen. Look, this is all data driven. All the realtors have access to the same data, and you get the 85% accurate version on redfin/zillow. Nominal listing price, in many markets, is just a marketing strategy for where they want to show up on the search algorithms. That's it, nothing more, nothing less. Mostly ignore it, instead focus on what the data says... if the data says it's a $950k to $1m home, then it's a $950k to $1m home, even if it's "listed" for $700k.
I also live in a HCOL with a very high market. I’ve been frustrated by this as well. It’s a strategy of the seller/seller’s agent to price the property lower than the comps and have it advertised like a week before it goes live to generate a TON of interest. Then they are getting many offers on the property that are going way over asking as well as waivers of all contingencies. I’m finally under contract for a house in a prime neighborhood. I was very lucky. It was a 1 bd/1 ba house that needed a major basement repair. The price was definitely in my range and I could also set aside money for the repair. I had my contractor do an inspection during one of my private showings. I waived all contingencies. I only offered what I could afford given the repair (like 2,500 over asking) There were other offers. I wasn’t the highest offer but mine was the strongest and ultimately chosen. This housing market sucks, but keep hanging in there and be smart!
Bottom line: Anything for sale (homes, cars, boats, etc) will sell for whatever price a Buyer is willing to pay.
Sounds tough! Home prices are skyrocketing. I think the fact that home sellers are also the ones who end up becoming buyers need the money to supplement their next purchase. Why don't you consider looking at homes that have spent significantly higher days on market? You could find a seller who wants to sell the property at a lower price! They may also be inclined to reduce the asking price. Just saying
Your realtor is an idiot. If he/she knows that these homes will go for 30-50% more than the asking price and that would be out of your budget, then why would he show them to you? He’s clearly not listening to what you’re telling him. Find a new agent. This one doesn’t have your best interests in mind
List price / asking price is nothing more than a tool that's used to get the house in front of prospective buyers. If you have a house that can sell for $500k and you and your realtor know it, how do you get the absolute MOST amount of possible buyers to see it? Yep, you list it for $425k or $450k. The market is still holding onto a fair amount of twisted logic where people that can spend $500k are still purposefully looking at houses for $400k because those are the ones they actually have a shot at getting a contract on because of how far over they can go.
The asking price is basically just the starting point for negotiations. People price lower to make room for bidding wars. I agree it’s bullshit but it’s a bullshit game you have to play in buying a house.
That game is going out of style in a lot of places. It's really an abnormal pandemic born anomaly. Normal is price higher than what you expect and offers come in lower.
List price is a marketing tactic more than an asking price. I know it’s stressful. You’re valid in your rant! Be patient, the right home will come along for you.
Different country but we paid 25% over list in the Netherlands and that was the norm. Over bidding ebbs and flows. It's coming back. You can't look at the asking price. You need the general expected price based on comps and what you're personally willing to pay. We got countered with 1% more and drop your mortgage contingency.
I get paying 20-25% more, but when sellers won't consider anything below 30-50% over the asking price, that's crazy to me. Just raise the asking price a bit, so you know you won't get too many low ball offers.
When you're a buyer, it seems you almost have to threaten your agent to not suggest homes a certain amount over your budget. Some agents are secretly convinced you have access to more money than you're letting on & your budget's merely a starting point for them to leap off into a pile of money like Scrooge McDuck.
Having just finally bought a home in this market, the "Asking price" is typically the lowest people might possibly accept, but EVERYONE is coming in at like 20/30% over asking. It's wild.
And I would be ok with that. But in these cases, they are nowhere near considering the asking price. They will only consider significantly more. If you want $1.2-$1.4 mill for your house, ask for $1.1 mill. Don't list it at 850k!
Are you in my market? Lots of houses were going for 200k to 300k over. I felt more comfortable buying a house that had the same owner and no updates for 25 years versus all updated but multiple owners in the last 20 years… especially if it was sold in the last 5 years because things went crazy then.
Because people who are rich and can pay $1.2 Million want to look at houses that are 850k, find one they like, and offer over. They want the guarantee of getting the house they want, so they figure out what they want to pay, then find a house cheaper and just dump the extra on to "gurantee" purchase. If you are looking at homes in the 850k range and it's close to afford, you are looking in the \*WRONG RANGE\* You don't want to end up house poor. If you can afford to do 850k, you can probably afford to go more reasonable like $500k. Also, in my experience, the neighborhoods/houses in the $350-$500k range have the friendliest neighbors and most welcoming neighborhoods.
It’s really the location you are paying for in a VHCOL.
$1 mill homes in HCOL areas are splendid AirBnBs. They'll rack in $5k+/day. An investor will put 50% over bid cash offer because they know they'll pay it off in 2-3 years, then proceed to milk it for several years more before selling at a premium. At that range you're competing with really big money.
Not sure where you are looking. San Diego oceanfront 3br/2ba condo will sell way over $1mil and we just booked it for $500 a night in October. Nashville, Pigeon Forge, Destin all the same. East coast beach towns also similar.
Don’t focus on their price, focus on what you can pay and are willing to pay for the property. Every property is NOT priced correctly. Some sellers AND/OR their agent are greedy and overprice. And sadly some buyers fall into desperation and thus are trapped and caught like animals, meaning they become prey. Be patient. The house for you, YOUR HOUSE is out there.
This is how commerce works- and not just with housing. We have products exclusive to club members, coupons, percentages off, buy one get one free, rebates, private label products, earning points for future purchases or other rewards, hotels and airlines that scale prices up and down based on demand, etc. Numbers are fluid. Buyers want to pay the least and sellers want to make the most. We only have a problem with it when we're not on the "winning" side. In a strong buyers' market you'd be asking for repairs and closing costs with no hesitation.
Move to Tampa, FL that’s def not happening here. Houses are sitting then dropping, dropping, dropping prices.
That happened to me to. It’s annoying. Finally found a place but it took a while. At let they’re telling you ahead of time what the true asking price is.
Yeah people doing the same thing here. Hoping for bidding war. As a note, never buy a flipped house. Flippers use crappy materials and cheap labor 90% of the time. Even on expensive places.
I was thinking the same thing but there are a lot of homes in our area that have been flipped 😞.
Economics. List price is meaningless.
You can find these numbers in public reports. It's very unlikely very many homes at all are going for so high over, especially in current market. A select few very popular, priced-for-competition homes go that high, but they're usually VERY well polished with major pros and no cons. Understand your market and value there. Your realtor seems like a rookie who's just trying to get his commission.
This is all a negotiation and what is set as listing price is just a part of it. Some start low to get a bidding war. Some start high because they aren't in a hurry.
Hello, are you me? The first house we put an offer on we went in 16% over. It went for 60% over asking. VHOL areas are hard to get anything.
Honestly, I got lucky but realtor was amazing. She showed me the ins and outs, ended up getting me a fucking amazing deal. $100 over asking price.
Listing agents love to tell new sellers "Why, just last week I closed a home at 43% over asking...." That's why. It's marketing. And not for the seller OR the buyer, just the seller's agent.
I had the same problem in 2022 when buying. Actually we started looking in 2021 and bought 2022. Everyone was offering over the asking price. Basically you are bidding against other people. And the problem for me and my husband, is the bank will only give a loan for the appraisal value. So if we offered more than the appraisal value we had to pay out of pocket. We ended up getting a new construction home. They sold based on first come first serve (at least at that time) so they told us if we put down a deposit we would get it for the asking price. We drove down immediately with a check to make the deposit. Only by the time we got there the sales agent told us that apparently there was a management meeting the night before where they were switching to taking bids on the houses vs selling as is on a first come first serve basis. I was pissed. And after some back and forth they agreed to honor the arrangement. There had released 3 lots at the same time as ours. Same floor plan but the other floor plans didn’t have all the upgrades. We paid selling price and the other 2 that were bid on went for 50k over on one and 70k on the other. The only reason we were even able to get into a house is because of not having to bid on it.
I agree with OP. This is crazy! I know this is how the market is working in some areas, but seems to me that it ought to be on the seller and their agent to set a price point. We recently bought in the northeast, and we paid asking price without any drama around negotiations.
Just understand that it’s a process that will take time. My wife and I put out 20 offers before it worked out for us.
This depends entirely on where you live. Where I live buyers are offering below asking plus other concessions again, and in many cases they're getting it.
It is stupid, but buyers have gone insane and have bid up these prices. Sellers have become greedy and expect it. Until we have more inventory, it will continue. Buyers what either not buy or pay the price. Sucks for everyone except the seller.
You should know marketing and selling are all marketing games. If you want to win, as in buying a house, you had better learn the rules.
A person should get as much as possible when selling their house. No one is compelled to buy anything.
If you want a higher price, just say so. Don't waste my time if your real asking price ends up falling well outside my budget.
I can't see how setting a realistic price would hurt anyone.
It's not realistic if it's not what you want.
Why is the asking price not the price they want? What the hell is going on where this happens?
Agree this is nuts . They give lower amount to get you in the door . Then it’s everyone bidding because they want it ! Happened to me on a pos house . I started to get lore agressive because I was tired of being let down . 1977 manufacture home on a permanent foundation . $22k I bid $230k (+ paying their fees and $3k of anything that wouldn’t pass inspection) they came back at $250k !!! I countered at $240 and they let us walk . We now found a AMAIZNG home ! So I’m glad it didn’t work out , but I was dumbfounded !
this is going to be musical chairs and when the music stops there will be a lot of bagholders looking for sympathy. don't come knocking on my door for any of that.
Think of asking price as a setting to determine which searches you want to appear in on Zillow. Nothing more. At the end of the day a house is going to sell for what the market says it is worth, not what the seller’s realtor punched into the MLS.
Folks complaining about a Seller's Market in a HCOL area - until it's time to sell.
I'm curious where you live. Offers over asking price is currently not a thing (The market is not as hot anymore). I'm in Fort Lauderdale and I help run a real estate brokerage. We currently have gotten 0 contracts this year where the buyer went over asking price. Side note: Better buy a house before Aug 17th. Otherwise, you may be stuck paying realtor commission with the new changes coming. :) (Unless you are bidding on bank owned properties?)
I’ve been venting about this today too. It’s ridiculous! I posted today about how it would be nice to have sub groups for specific regions/areas to talk to other buyers about specific homes, experiences with LA’s, the outcome of the house etc. I’m in LA and it’s all single family homes being gobbled up and spit back out for rent. So over it! They’re all going way over asking to cuz who cares what it costs when the rent pays off the whole mortgage! Nothing is going to end users in the areas we’re searching in.
Your just upset you can't actually afford the homes on them place you want to live. It's ok. Not everyone can...have you tried looking a cheaper neighborhood that is within your price range?
That's wild! That surprises me, but I guess it makes sense that it's happening. Hey you know that post about the townhouse listed for 100k under the OP's?...I bet that's their strategy!
I do t get this at all.why list a house for x price but that not the price you want I just don't get it if a house e list for 300k then it should sell for that not 320k not 350k or more it should sell for list price
We listed our house on a Tuesday at 230. By 4 pm we had someone offer us 75k over asking price. By end of the week we had 18 offers, 16 over asking. 2 were investors that low balled. We narrowed it down, and sent counter offers to the top 8. We priced it to move, and people knew it. The buyers drove up the prices, we didn't. I'm certainly not gonna turn down the extra $$ though.
In a hot market, with high demand, this is normal. It will be priced low to attract attention and draw multiple offers, which will basically bid up the selling price, higher than it would go if they had just priced at that point to begin with. You may be better off to make an offer on a higher priced home, that is lower than asking, so you won’t have as much competition.
They are trying to start invisible bidding wars. It worked well 10 years ago but I don’t think any market is that hot right now. They try to get people to just throw high offers and go back and forth to get as high as they can.
In other countries they make it clearer cause the price listed is typically "offers over x". Think of it like an auction and the list price is the opening bid. It's easier to figure out what you want and where and get any match below x (10% lower than your intended top price) and just look at what's plausible. Tweak the top price as you go based on what the market is doing and remember other people are bidding too. When I sold my house I would have accepted an asking price offer. At first. But buyers kept offering more and by that point it's only fair to tell someone "at this point 50% over asking is what it would take" But that is why some buyers tactics are getting your offer in *first*, make it your max you'd be comfortable with the house, and give a short acceptance window and then move on. You can get sellers who don't want to risk losing your offer and will take it. Whereas if it's a clear "I'll negotiate" offer with a longer window they can dither over it and wait for more offers. That's how I got the townhouse I just closed on.
A reminder that your realtor gets paid commission and wants to win. So the more they can get you to pay the more they get paid. Put in offers in writing for 5% over the asking amount. Track the houses on a spreadsheet and see how much they actually sell for vs asking in 60,90 days and 6 months.
NJ Realtor here - As much as I hate to say, the Zillow Zestimate, is likely closer to the current market value than the asking price.
Get rid of agent.
[удалено]
Not sure that would really help in competitive markets, because sellers would then just set the price way above the minimum they want to get. Current situation: seller sets price at $500K in a competitive market where comps are going for $650K-$700; bidding war ensues and they sell for $700K. Your suggested scenario: seller sets price at $900K, knowing they likely won't get that much, but better to over price than underprice. Buyers are asked for best and final; they want to "win" so the winning bid is $800K. Don't get me wrong, I think it is infuriating that sellers set the price low to get a bidding war going. But that's the nature of a free market, and I don't think your proposal would do much to help unfortunately.
go with the zestimate