In Denver right now, there are limited listings for the number of buyers looking for homes. This is causing multiple offers, and many offers are way over list price. When you work for the buyer, you HAVE to do comparables to see if the list price is "fair market value", which is what an appraisal would come in at.
Right now, we are seeing offers coming in THOUSANDS more than list price, and buyers should address whether they are able to make up the difference between the appraised value and their contract price. The lender will only lend the appraised value, so if a buyer offers $50k more than list price, the difference needs to be addressed. IF the buyer is willing to make up this difference, this amount will be needed at closing, ALONG WITH their down payment and closing costs.
It is IMPERATIVE for buyers to review their financial situation to know what they are offering and what will be expected. Will they be upside down financially when they move in? Yes, they will. BUT, right now homes are appreciating quickly (in March the metro area averaged 15% increase). If a buyer is planning on remaining in a property for over one year, they should make up this amount. BUT, if a buyer loses their job or something happens and they HAVE to sell, they most likely will be upside down and need to bring money to closing.
I was hoping as we got into the true spring, we would see an uptick in new listings, but so far, the week of April 10th had the most new listings, and has not topped that amount since.
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