Are you thinking of offering more than the listing price when buying a home? If so, you’re not alone. In today’s competitive housing market, many home buyers are choosing to offer a little bit more in order to stand out from the crowd. But is this the right decision for you? In this blog post from the Rob Ellerman Team in Kansas City, we will discuss the pros and cons of offering more than the listing price for a home.
Pro: Increase Your Chances of Having Your Offer Accepted
The most obvious pro of offering more than the listing price is that it increases your chances of having your offer accepted. In a market where there are multiple offers on a home, the seller is often more likely to accept the offer with the highest dollar amount. If you’re really set on buying a particular home, offering more than the listing price may be worth it to you.
Pro: May Give You Negotiating Power
Another potential advantage of offering more than the listing price is that it could give you some negotiating power down the line. For example, if you find out after the inspection that there are significant repairs needed, you may be able to negotiate with the seller for them to pay for part or all of the repairs. This is less likely to happen if you had offered the listing price or less.
Con: You May Pay More Than the Home Is Worth
However, there are also some potential disadvantages to offering more than the listing price. One is that you could end up paying more than the home is actually worth. In a hot housing market, prices can sometimes become inflated and you don’t want to overpay for your new home.
Con: You May Have to Pay an Appraisal Gap
Another downside is that if your offer is accepted but the appraisal comes in lower than the purchase price, you may be responsible for making up the difference, otherwise known as an appraisal gap. Your lender will only approve your mortgage for up to the appraisal amount, so the appraisal gap must be paid out of pocket.
The Rob Ellerman Team – Your Kansas City Real Estate Agents
Before making any decisions, it’s important to speak with your real estate agent about what makes sense for your situation. They will be able to provide you with guidance and advice based on their experience in the market. If you’re looking for the best real estate agents in Kansas City, contact the Rob Ellerman Team today!
