Record-low interest rates and low supply have boosted demand across the country in the last year. In other words, more people are buying than ever before. Since it's a seller's market, buyers may need to go above and beyond to stand out. Offering the above-asking price is a popular differentiating strategy, albeit it isn't suited for everyone.

How would you know if that strategy is right for you? By answering the following questions below you will determine if you can make that move. 

Is it within your budget?

If you can afford it, you may offer more than the asking price. Your budget will always come first when you're buying a home. Whatever you add to the asking price, make sure that it will fit into the bigger financial picture.

Are you in a competitive market?

While markets are still heating up across the country, purchasing in certain cities will prove much more cutthroat than others. Offers may rocket up in some places, but, if you happen to be looking in less competitive areas, you may not need to propose such a generous offer

Are you in a bidding war?

If you want to win a bidding war, you may offer more than the asking price. Competing with other buyers using this strategy isn't for everyone, so be sure you're in it before you place a bid. If you decide to go above and beyond your first request, you'll need to set a hard-stop number or your absolute limit. This will aid you in sticking to a budget while competing.

Are there cash offers on the table?

Sellers tend to prioritize cash offers because they often close faster and more efficiently (NerdWallet, 2021). A study from the University of California San Diego found that sellers often opt to accept cash offers that are 12% lower than similar financed offers. So, if you’re serious about securing the home but are bidding against a cash buyer, you may need to make your offer even more enticing.

Is the seller reluctant to let the home go?

Unfortunately, some homeowners post their home just to see how it sells and has no intention of actually selling it. They may be having second thoughts in other circumstances. If the seller is hesitant to sell to anyone, a little extra cash could help you win the deal.

Do you really adore it?

Check your emotions once you've made sure that providing more than the asking price makes sense logistically. It may be a smart idea to increase your offer if this particular house feels great for you and the additional expense is justified. Just keep in mind that the ideal home is always within your budget. It wasn't meant to be if the seller rejects your offer or the bidding war becomes too heated.

Buying a house is most likely be one of the biggest investments in your life, so before proposing an offer above the asking price, you’ll want to ensure it’s the right move for you.  

Contact our team today so that we can guide you in this uncertain market.