Once you've found a home that you're ready to go after, it's time to stand out to the seller among other potential buyers. One tried and true way to do so is to offer more than the asking price. This extra cash could be just what you need to make your offer the winning one.
But, before you offer to shell out more money than what the sellers are asking, you should consider a few of things:
Do you really want this house
Be honest. From time to time, a buyer can get caught up in making competing offers -- just to win. They don't realize that they are spending more than they want for a home that might not be exactly what they are looking for.
Higher monthly payments
As you make higher offers, your monthly payment starts to climb. Before placing a higher offer, you need to make sure that you will be totally comfortable with the mortgage payments you will have to make.
The graphic below shows an estimate of about how much your monthly payment would increase at the purchase price.
Sure, offering above the listing price could help you outbid the other buyers. However, there could be no competition to begin with. You might make an outrageously high offer when there's were no other potential buyers and could buy the house at asking price.
How much over should I offer?
It depends. Determining exactly how much to offer can be difficult. It varies from market-to-market. And, sometimes, price isn't the most important thing to the seller. In some situations, the seller may want a buyer who can close the quickest.
This is why it is important to have a knowledgeable real estate agent on your side! Your agent can help you come up with an appropriate offer, and figure out which route should be taken so your deal is accepted. Use one of our Experts!