David Ratoosh, Marvin Gardens Real Estate, (510) 522-2222, email@example.com
Q: How do I decide a purchase price when buying a home in a competitive market?
A: During the past six months real estate prices in the Bay Area have soared. Even without the frenzy of properties receiving multiple offers, buying a home can be a nerve-wracking endeavor full of tough questions and decisions. In this market you may have to bid over the asking price to be competitive. So how much should you bid on a prospective home?
To aid in your decision we have listed a few points to consider.
In this market the list price often has little bearing on the final sales price. In the East Bay, during the past six months, properties have sold for about 10 percent more than the list price. Since homes are often priced below market rates to generate multiple offers, review recently sold properties with your agent to help determine the amount you should offer.
Have your agent ascertain how many disclosure packets have been sent. While not always required, agents often send disclosure packages for buyers to consider while writing their offer. The packets consist of information and reports about the home, such as remodels, additions and home inspections.
The amount of disclosure packets requested could be a preliminary gauge to the potential competition since buyers will need to review the information prior to submitting a written offer. In our experience, for every five disclosure packets requested, we receive one written offer.
The best measure of competition is how many offers are being submitted. Your agent can obtain this information but it will be close to the deadline for submitted offers. Because of this, prepare in advance for the different scenarios. Ultimately, your offer should be one you are happy with whether you get the property or whether you don't.