Making an offer over the asking price on a house often makes buyers wince.

But let’s face it, paying above list price is just a reality in certain circumstances—at least if you really have any hopes of getting that house!

Is it a good idea?  Well, this article from Realtor.com outlines a few reasons why it might be.  It’s a good read and I highly recommend it.

Reasons to Offer Over Asking

In many parts of the country we are in what would be considered a “sellers market”, so buyers must adapt.  A good rule of thumb: ‘If houses are selling in your neighborhood in less than 10 days, it’s a strong seller’s market’.

Here are a few other reasons you may want to bid more than list price:

  • You love the home and want to make sure you get it
  • You know there’s a bidding war or lots of competition for the property
  • The house is undervalued (comparable sales can help you judge this)
  • There are cash bids on the table

How To Decide

With that said, does it really make financial sense to pay more for a home than the asking price?

The answer is…it depends – and you should do the math to make sure.

My friends at The MBS Highway have put together a tool that helps buyers decide if making an offer over the asking price is a good financial decision. 

Their “Buy Over Ask” tool takes into account a myriad of factors – from the asking price itself to expected appreciation – even to a break-even point that shows the exact month you should expect your return.

In the example above, by offering $7,500 over the seller’s asking price, a buyer’s break-even point is only one month away…and they can expect appreciation of nearly $100K over the next 5 years.  In this case, it looks like paying a bit over asking would be a good idea, indeed.

Find Out If Offering Over Asking Is Right For You

It would be my pleasure to help any potential buyer find out if bidding over list is a good idea. 

Reach out to me and I can easily put together a summary just like the one above for you to help determine if making an offer over the asking price is something you should consider!