HOW MUCH SHOULD I OFFER
In California the buyers are getting another state tax credit up to $10,000 (that will last for a very short period) on top of the federal tax credit. This credit has created a bidding war in a smaller price range of properties of under $500,000 and we have multiple offers situations.
One of my clients is buying a retirement home. We are making an all cash offer at or above listing price. We have already made several offers and so far all of them have been out bid by other offers. This weekend we made an offer at listing price and while we are waiting for an answer from the seller this client asked me if we should raise our offer, if yes, how much should I offer. I said that it all depends on how much you like the home. Can you see yourself in this home being happy after a few years down the road. Does it meet your requirements now and will it meet your requirements for several years down the road as well. I would like you to be happy for years to come. And if you are thinking to raise the offer just for the reason of the tax credit then do not raise the offer. It's all about how much you like the home, not about how much it costs or how much you will save (on Tax/Tax credit). After they said that they really like the house, we have raised our offer and we will see what happens.
As an agent, when someone asks us how much should I offer, I do not think one should advise if the buyer/seller should offer/ask higher or lower or an exact amount. If you do... and appraisal comes in lower, or before escrow closes the market changes, or interest rates change, or prices goes up or down, then what happens? If you direct them one way or the other and if you are right... everything is fine and dandy, but say your opinion turned out to be wrong... guess who is going to be blamed. Our job is to educate the buyers and sellers of the current market condition and current value and let them make the decision.
The bottom line is that our answer to a question of how much should I offer or how much price should I ask or should I buy now or should I wait, especially for an owner occupant, the answer I prefer is that the decision to buy or sell now or wait for a better price is yours. I would give them the facts of the current market. The decision should not be based on tax credit alone. If your decision is based on FEAR or GREED, chances are it will be wrong. Decisions made influenced by EMOTIONS or under PRESSURE hardly ever turn out to be right decisions.
When working with an investor client is a subject of another topic alltogether. Investors do not make decisions on emotions. For investor its all about profit and loss and ROI (Return on Investment).
If you are looking to buy or sell in Inland Empire or San Gabriel Valley Area of Southern California I will be more than happy to assist you. Please call or email. Phone: (909)615-9769 or Email:Bill@BillDesai.com.
Bill Desai, Realtor®/Broker, GRI, e-PRO, SFR.