Tips & Trends for the Flagstaff Real Estate Market:
Past Articles [March 2004]
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Some Buyers are Finding Themselves in Multiple Offer Competition
Last month I wrote about the situation in Flagstaff where the availability of homes for sale less than $250, 000 was at its lowest point in recent memory. When inventories of homes for sale are low and interest rates are low, buyers can expect to run into competition from other potential buyers. Homes that are priced right in many cases are generating more than one offer. I have seen this situation develop more than once in the past month.
Some buyers shy away from multiple-offer competitions for a variety of reasons. They may be afraid of over-paying. They might have lost out before and don't want to go through the agony of defeat again. Granted, a multi-bid encounter increases the anxiety level of the home buying experience. But, if you are successful, you have the benefit of knowing that you've bought a home that was in high demand.
The key to avoid over-paying in a multiple-offer competition is to have a good grasp of current market values in the area. To develop this expertise, ask your agent to conduct a comparative market analysis for the neighborhood you are interested in. The result of this analysis will tell you what comparative homes sold for.
Buyers who haven't done their homework may not have a sense of how much they should offer when there is more than one offer. If you haven't educated yourself about selling prices, you may feel uncomfortable offering more than the asking price even though this may be precisely what you need to do if you want to buy the property.
It helps to work with a real estate agent who has intimate knowledge of the area in which you want to live or invest. He or she can educate you about listing and selling prices as you spend time together looking at properties.
In general, the offer that wins in a multiple-offer competition is the one with a combination of the best price, the shortest closing and the fewest contingencies. A contingency is a condition that must be satisfied before the transaction can close. Typical contingencies are for inspections and for buyer's financing. Pre-approved buyers have an edge because they don't need a financing contingency.
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“Mary Monday made the experience of selling my home a genuine pleasure. It delights me to know there are true professionals left in the world.”—BS |
