Tuesday, February 19, 2019 / by Steve Mohseni
Buyers so often feel dejected when they find a property they love, only to discover multiple parties are interested and bidding. In some markets this is to be anticipated, and smart buyer agents educate their buyers to this possibility before they even start looking. While it usually feels unfair that others are bidding against you, here are some BUYER upsides (Don't worry about sellers.....they have lots to celebrate about!):
1. When others want a property you want, chances are it is very desirable. Usually when others want this property now, others will want it in the future when you sell.....but only if you are not in a super-tight inventory environment that can artificially drive demand.
2. Know that you are buying in a neighborhood/area that is in high demand.
3. Usually multiple bids emerge when demand outweighs supply. Sometimes, multiple bids emerge when something is priced below market, or the market is rising in value. Maybe the market is under-valued?
4. Bidding as much as you are (semi) comfortable doing is smartest. Some people do get completely carried away and pay vastly over the asking price. Granted they usually get the property, but irrational exuberance can have bad consequences.
5. Bargains - the homes no-one else wants - are very scarce in highly desirable neighborhoods. Beware of buying a bargain and then owning a bargain.The 'thrill' of a good deal may be outweighed by the quality of the product.
6. Multiple Bids do not always lead to a sale price over the asking price. Sometimes the winning bid is below the asking price. Sometimes the terms matter more than the price. When multiple parties are bidding, most times this gives a very clear indication what the market is willing to bear at that moment, more so than simply an asking price.
Hope this helps you better understand forever demanding bay area real estate. California is not building enough homes to pace the population growth (immigration and organic) and residential housing will stay in demand in foreseeable future.
Homeownership is a long-term financial success strategy...so long you are stable and committed to the process, you will never go wrong. Get out there and buy your own house with confidence...Take advantage of the current low low mortgage rates. Give us a call and let us show you the way...we love to help you!