If you’re like many people, you’ve heard the conventional wisdom that says you should always offer less than a seller is asking when you buy a home – but is that advice really good? Here’s what you need to know about when you should offer over asking price on a home.
There are some instances where it makes sense to offer over asking price on a home. Check out these times that it may be smarter to put up a bit more of your money:
- When you’re madly in love with the home
- When you’re competing with cash buyers
- When you’re in a seller’s market
Here’s a closer look at each.
Situation #1 to Offer Over Asking Price on a Home: When You’re Madly in Love With the House and Can’t Bear to Miss Out
When you fall in love with a home and you’d be heartbroken if someone else bought it, it may make sense to offer the seller more than what they’re asking. Although not all sellers automatically accept the highest offer, many do – and you could shut down anyone else’s attempt at buying if you make your very best offer (over asking price) right out of the gate.
Related: 5 benefits of using a VA loan to buy a home in Knoxville
Situation #2 to Offer Over Asking Price on a Home: When You’re Competing With Cash Buyers
Cash buyers are attractive to sellers because sellers know there won’t be any financing snags – and cash purchases are typically a lot faster than those that are financed by lenders. It’s sometimes smart to offer over asking price on a home if you’re up against cash buyers, because the prospect of making more money (despite having to wait a couple weeks to a month longer) may be enough to entice sellers to choose your offer instead.
Related: Guide to buying a FSBO in Knoxville
Situation #3 to Offer Over Asking Price on a Home: When You’re in a Seller’s Market
If there are fewer homes on the market than there are buyers, you’re in a seller’s market. That means that sellers have an advantage; buyers are competing over the few homes that are available. Sellers generally know that buyers who really need to make a purchase will be willing to waive contingencies, offer more money, and close on their terms – and that may mean by offering more, you give yourself an advantage over all the other buyers vying for the home.
Related: Should you ever waive a home inspection?
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