If you’re planning to buy a home this season, you’re probably thinking about what you’ll need to do to get your offer accepted. In previous years, it was common for buyers to try and determine how much less than the asking price they could offer to still get the home. The buyer and seller would then negotiate and typically agree on a revised price that was somewhere between the buyer’s bid and the home’s initial asking price.

In today’s real estate market, buyers shouldn’t shop for a home with the same expectations.

Things Are Different in Today’s Market

In West Hartford Connecticut at present, the Buyers are now trying to figure out how much over the asking price they have to offer in order to stand a shot at getting their offer accepted. It is common in this market for Buyers to have to pay 3% to 15% over the asking price. In West Hartford CT, cash is King. If Buyers don’t have the cash many are choosing to wave their mortgage contingencies, as well as, their home inspections on top of paying over the Sellers asking price in the hope of having their offers standout. The average sale price in West Hartford, CT is up 9.7 % from last year, the average days on market is down to just 12, the supply of homes is down to 1.1 months. The supply of homes is down 42% from last year.

The housing market is anything but normal at present. According to the National Association of Realtors (NAR), the average home that’s sold today:

• Receives 4.8 offers
• Sells in just 17 days

Homes selling quickly and receiving multiple offers shows how competitive the housing market is for buyers right now. This is because there are more buyers on the market than homes for sale. When the number of homes available can’t keep up with demand, homes often sell for more than the asking price.

How Does This Impact You When It’s Time To Submit an Offer?

Market conditions should help guide your decisions throughout the process. Today, the asking price of a home is often the floor of the negotiation rather than the ceiling. In this market it is the suggested starting price that often gets bid up much higher. Knowing this is important when it’s time to submit an offer, but you should also use that information as you’re searching for homes too. After all, you don’t want to fall in love with a home that ultimately sells for a price higher than what you’ve budgeted for. For example, if you are pre qualified to purchase up to a $400,000 home.  Then you should be looking at homes in the $300,000 to $350,000 price range to give yourself enough negotiating room to the upside. In this market, keep in mind that many homes are going for 3% to 15% over their asking prices.

The Mortgage Reports has advice if you’re looking to purchase a home in a competitive market. The article encourages you to be realistic with your housing search, saying:

“The best thing to do is set your budget and expectations ahead of time so you know how much you can afford to offer — and when to walk away. This will make negotiations a lot easier.”

Of course, when you’ve found your dream home, you’ll want to do everything you can to submit your best offer up front and win a potential bidding war. Knowing the current market is key to crafting a winning offer. That’s where working with the HoyeHomeTeam expert real estate advisors becomes critical.

As real estate professional’s we will draw from years of experience and expert-level knowledge of today’s housing market to help you throughout the process. We know how to take into account the local market conditions in the Greater Hartford CT area to make sure that your offer stands out above the rest.

Bottom Line

Understanding how to approach the asking price of a home and what’s happening in today’s real estate market are critical for buyers. Let’s connect so we can work together to create a winning plan for you.