Are you considering putting an offer in that is more than the listing price when purchasing a property? If that’s the case, you’re not alone. In today’s real estate market, many buyers are eager to stand out from the crowd by offering a little above market value in order to make their offer more competitive. In today’s blog post from the Rob Ellerman Team in Des Moines. We’ll explore the benefits and drawbacks of offering more than the asking price on a home for sale.
Pro: It’s More Likely Your Offer Will Be Accepted
One of the main reasons to offer more than asking price is that generally, it’s more likely your offer will be accepted. In a situation where there are many offers on the table, going above asking can put you ahead of the pack and make your offer more appealing to the seller.
Pro: It May Increase Your Negotiating Power
If you offer more than the asking price, it may give you more negotiating power. For instance, if a problem is found during the inspection, the fact that you offered over listing price will give you more negotiating power to have the seller help cover the costs of the repairs.
Con: You Might Pay More Than the Market Value
While it’s true that your offer may be more likely to be accepted by the seller, by offering more than the listing price, you also run the risk of paying more than the home is actually worth. In order to avoid this, be sure to do your homework and research recent comparable sales in the area so you have a good idea of what the market value for the home is before making an offer.
Con: You May Need Money Upfront for the Appraisal Gap
If you’re taking out a loan to finance your home purchase, offering more than list price could put you in a difficult financial situation if the appraisal comes in lower than the agreed-upon purchase price. This is because most lenders will only lend you money based on the appraised value of the property, not the higher purchase price. So, if you’re planning on offering more than asking price, make sure you have enough money to cover the difference between the appraised value and purchase price.
Your Des Moines Real Estate Team
Are you ready to start looking at homes for sale in Des Moines? Start by contacting the Rob Ellerman Team!. We’ll help you navigate the real estate market like a pro and find the home of your dreams.
