Due to low inventory and high demand for current Real Estate, finding the true Market Value of a property can be difficult.
More often than not there are multiple offers occurring on each property with buyers being pushed to their maximum comfort levels. Along with being asked to offer above asking price clients are also being asked to make no-condition offers to make it more attractive to sellers.
It is more important than ever to have the right professionals in place to navigate buyers through current market conditions. Your Real Estate Agent should be presenting comparable sales to justify offering a certain price.
Your Mortgage Broker should guide you to what your maximum borrowing power is while keeping monthly payments within your comfort level. It is important to note that you may be approved for a certain amount of mortgage but lenders still have the right to decline any specific property.
Tread very carefully when offering on properties without conditions.
Due to the lack of inventory often “listing” price means very little. In fact, some Real Estate Agents will purposely list a property at a lower price than market value. If this property then receives multiple offers it is then more difficult to know where the true value is leading to a frenzy of bidding. This is obviously great for the seller but harder for buyers to know the true value.
Should you be offering over the asking price?
The simple answer is yes, as long as the market supports the price you are offering. You will need to trust your Real Estate Agent and Mortgage Broker, remember Real Estate is a long-term investment and the recent large increases will not continue.
You are always better to be paying your own mortgage off rather than someone else’s.