Goodspeed: Listing price is not necessarily the selling price
QUESTION: We found a home that we love and made a full price offer. Our realtor came back to us and said the seller did not accept our offer, but said we could make a higher one if we wanted. We thought a full price offer meant we were going to get the home. What gives?
ANSWER: A very hot housing market, that’s what gives.
When sellers list their home for sale, all of the information in the listing – age, size, bedrooms, etc. – has to be accurate to the best of the seller’s knowledge. Price does not.
The listing price is more like an advertisement rather than the price to be accepted. Before a seller accepts an offer, he/she will consider more than just the dollar amount offered. Other considerations are the buyer’s financing and contingencies.
If the seller receives multiple offers, all at asking, he/she will evaluate the bids, choose the strongest and instruct the listing agent to go back to those prospects, tell them there is a bidding war and invite them to submit a higher offer. Sometimes sellers will even try to create a bidding war by listing the home a little below market value. This tactic will often result in the home being sold above asking because people love a bargain and may get caught up in the frenzy of a bidding war and trying to land a good home.
As a buyer, always try to find out as much as you can about the seller’s mindset and motivation for selling. How long has the home been on the market? Any other offers? Price reductions? You will also improve your chances of making a successful offer and being a strong buyer by getting preapproved for financing.
Learn all you can about the current market. Offer only what you can afford. Don’t get caught up in a bidding war unless the home is really exceptional and you can afford it.
Linda Goodspeed is a longtime real estate writer and author of “In and out of Darkness.” Email her at: firstname.lastname@example.org.