So you just lost out on a bidding war on the 3rd house you have put bids in on. You offered full price, but was then asked to provide your final and best offer. So you increased your offer by another $2,000 and still lost out on the home you fell in love with. Situations like this are not unique in this super-strong seller’s market we’re in.
Some short time ago, I received a frustrated buyer’s voicemail message indicating he was going to put off his search for a while. Looking at houses that had better photos than in reality and getting beat out on his last 3 offers, he and his wife were going to put their home search on the back burner.
I responded with the following email that contains good advice for all frustrated home buyers currently out there looking to buy a home in a very hot home seller’s market:
I received your message and have no problem with your decision to wait as buying a house is always a personal decision one (sometimes two) must make.
I would just remind you that Johns mortgage rate this past summer was around 3.6% and rates are currently hovering between 4.25% and 4.5%. Historically, over the past 30 years, the average rate has been just above 8%.
I bought my first home at 16% mortgage rate in 1980, but I needed a home and that was the current rate. Mortgage rates currently remain near historical lows.
Bottom line: Would you wait and feel good about purchasing a year from now at a mortgage rate above 5% with the likelihood of home prices up 5% from current levels? This is the prospect many are facing and why you are seeing such high activity levels this early in March.
I wish you the best and will be happy to help whenever you are ready.
After the buyer read my response, he and his wife went out the very next day, found a house they loved, called me to show it to them again and we placed a full price offer. Although the offer was full price, they increased their offer above full price since there were several other offers and they didn’t want to lose this house. I’m happy to report that they placed the winning bid on a house they will just love for years to come.
Moral: Don’t Put Off Your Home Purchase – Just realize competition is stiff and when you see a house you like, you need to respond quickly and firmly with a substantial offer. This isn’t the market to think you can get a house by offering 5 or 10% less than full ask and an offer above full ask is required when the home you seek is priced accurately!