Buying a home in today’s competitive market can be a very frustrating process, especially if you are a first time homebuyer. It is not uncommon to see multiple offers being received on homes put on the market the very first day! The question people need to ask themselves is are they bidding ahead or behind the market?
Let’s be honest; everybody wants a good deal. If you are trying to get a good deal by bidding on a house lower than the market value, you will most likely not get that house. I would advocate that a good deal is buying a first-time homebuyer’s house in today’s market at value or even slightly higher than value! Average prices for first-time homebuyers houses are going up by 6-10% per year. How many investments are there where you can find that type of return? Perceptions need to change. You get a good deal by purchasing the house, not by offering a lower price. For example, let’s say you purchase a house listed for $200,000 and you find out that are multiple offers. If houses in that price range are going up 5% per year, that means that your house would be worth $210,000 in one year after you purchased it. Should you feel bad about offering $210,000? No! For this example and from an investment perspective, you are only giving up the first year’s return. The person that bid at market and didn’t get the house, didn’t get anything. My point is that you need to be ahead of the market and not behind it. Bid knowing that you are purchasing a place to live and an opportunity to see a possible return on your investment. You are bidding on something that is going up in value, not down.
If you need help learning about how you can prepare yourself to outbid your competitors, please call us so we can set up a meeting to review your options for bidding on a house and how we can help you win!