No one wants to overpay for a house. Well, most people don't want to overpay for a house, but there are those of us - yes, my husband and me included - who are willing to pay a premium to get exactly what we want.
We understand that when we go to sell the house, we may not be able to recoup everything or as much as we would like but that is absolutely okay because we don't look at our house as an investment, but rather, as a home to love and enjoy. And that is worth more to us than a few extra dollars a month we could save by paying less for a house we don't like as much.
And there is nothing wrong with that because some people look at a home purchase as a lifestyle choice and there are certain things they want badly enough for which they'll pay a premium.
Then there are folks who ask the same questions whether it is a hot market, a sellers' market or even if there is competition. "What's it worth? What are the comps? Is it overpriced?"
The real answer to that is, "It's worth what you want to pay for it."
In those scenarios, I advise them to offer to the "point of pain."
In other words, if you offer this price and find out someone offered $1,000 more, would you regret your offer price? If the answer is yes, then they need to figure out at what point they won't regret losing the house. Is it $5,000? $10,000? $50,000?
(Of course, if someone cannot afford to stetch financially for a house, then it is only common sense that this advice does not apply to them). I mean, let's not be stupid about it.
In a competitive market, when there are multiple offers and you find your dream house, sometimes you have to consider going for it and just offering what you are willing to pay, to heck with what the house down the street sold for 9 months ago.
Obviously, there are financial limitations to consider, but if you have the financial wherewithal to do so, and it's the house you have been waiting for months - or longer - to come on the market in a neighborhood where homes don't come up very often, then sometimes you need to focus more on what you are willing to pay, given there are other offers, and less on "what it's worth" because in this Alexandria, VA market, I can assure you, for a great house in an often sought after neighborhood, someone else is not only going in with a full price offer, they may well be going in waiving contingencies you want for your protection.
Fretting over comps and how the house is priced doesn't get you in the game at all. If you don't want to play, that's absolutely fine, but when you're in a competitive sellers' market, you have to be prepared to go all in or just sit it out.
Doesn't it at least make sense to make a competitive offer to see if you're even going to get in the game? Asking for contingencies and offering substantially less than full price when you know there are others writing on the same house probably doesn't make a lot of sense if it's a house you are going to regret losing.
If the house doesn't appraise and you don't waive your appraisal contingency, then at that point, you may have to make a decision as to how much cash out of pocket you are willing to come in order to move forward if the sellers are stubborn about lowering the price. But at least at that point, it's your choice to make - and, at least, you have taken a shot and done the best you could.
Sometimes the BEST deal you'll get in this Alexandria, VA housing market is to actually be the lucky buyer to get the house!
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