Emotion in Real Estate
With little inventory of homes and many buyers looking to make a move, we are seeing more and more homes selling for above list price when multiple offers are on the table. When working with Buyers, we often are asked "how much should we go over asking"? We say the same thing to all of them, "WE CAN'T MAKE THAT DECISION FOR YOU". Our thoughts are this, you need to find that magic number where if you win the bid you will not feel you overpaid for the house. But if you loose the bid by $1000 you will not say you would have paid that, but instead walk away knowing that you would not have paid a penny more. Before submitting an offer on any property we let our clients know what we feel the home is worth based on past comparable sales. Depending on how many offers are on the table will dictate our game plan.
So how does the Buyer decide how much to offer when they are in a bidding war? We have chalked it up to EMOTION. When a buyer walks into a home for the first time does the home HUG them? Consider it like LOVE AT FIRST SIGHT. Just like when you meet that special someone, somthing inside you tells you that this is the one. It is the same when buying a home. You will instantly feel an emotion towards the house when you walk through the door. It could even happen when you pull up. So for any Sellers out there, this is exactly why you want to stage your home. You need to create a space that potential buyers will connect with and essentially fall in love with. If you can do that, then the odds are in your favor that you will get top dollar for your property. Buyers who have fallen for a home, are more likely to fight till the end. Now picture two buyers dueling it out for the love of their life (in this case the house). Can you understand now why many homes are selling for way above asking? One thing we will remind our Buyers of is that if they win the bid, the bank will want an appraisal. Banks will mortgage up to 80% of the appraised value of the home. The Buyers will be required to come up with the difference. Do they have the money to do that?
Welcome to the emotional ride of Real Estate! Sit back and buckle up.
Your Friends in Real Estate,
Melissa Snell & Jenell Boyd