If you found the home that you want and there are multiple offers, forget about the comps and list price and offer what you can afford.
When it comes to buying property, having been a real estate agent has its benefits, but there is also a downside. Too much experience in looking at comparable homes, sold prices and days on market can make you very cautious. The list price of the home is not it's value. The value of the home is how bad you want the home and what you are willing to pay. Of course this idea is a little too much for some people to actually consider.
I thought of this after my clients missed out on a one-of-a-kind home they really wanted. The home checked all the boxes in size, location, solar, radiant floor heat and amazing views. My clients are former real estate agents in the California luxury home market. When they first discussed the prospect of making an offer, they asked me for the comps. All 6 comps had a list to close date of 40 days. That means they went under contract immediately. Two of the six homes sold for above asking price and one was $35,000 above asking. The rest were at asking price.
We knew there were three other offers, possibly four going in. My buyers went with $6,000 above asking price and unfortunately it wasn't enough to cinch the deal. They were too fixated on the list price as a benchmark. When they found out the seller accepted a higher offer, the disappointment was immense. As real estate agents we can only do so much when advising our clients about what to offer.
In the 2021-2022 real estate market, forget about cost per square foot and previous sales and buy what you can afford. You may end up with the house you really want!
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