In most cases, homebuyers are eager to get the house they want for the lowest price possible; it’s a normal part of the process for homebuyers to try to negotiate as far below list price as the seller’s willing to accept.
In some instances, though, buyers actually do end up paying exactly the price as listed… and occasionally, they may even make an offer that’s above and beyond what the seller has asked for.
That may sound absurd, but in this post, we’re going to highlight some of the scenarios in which it might make sense to make an offer above list price.
When to Make an Offer Above List Price
When You’re in a Seller’s Market
A seller’s market describes conditions in which more people are buying than selling.
In such conditions, there may be several parties interested in a single home… and to stand out from your competition, one thing you can do is make a really great offer, one that sellers are likely to accept right away.
In other words, making an offer over list price can sometimes be an essential way to get leverage, and to appeal to a seller who’s ready to get their house sold.
When You’re in a Bidding War
Speaking of having multiple interested parties, you may sometimes find yourself in a situation where multiple people are competing for the same house, one-upping each other’s offers. This is what’s known as a bidding war, and it can happen when it’s a seller’s market or when there’s an especially desirable home up for grabs.
If you want to win the bidding war, one way to do it is to swing for the fences. Make an offer big enough that some of the other potential buyers drop out of the running.
When the House is Underpriced
Sometimes, buyers can mess up in their pricing, and list the house for quite a bit less than what it’s actually worth.
Here is where working with a real estate agent can be helpful; your agent can look at comps and tell you if the price is listed below where it should be.
In these cases, you can make an offer above list price and still come away with a really good deal.
And of course, when a nice home is underpriced, it’s likely you’re going to find yourself competing against other buyers, just as we talked about above.
When You Need to Motivate the Seller
Most of the sellers you’ll run into are eager to get their listing sold.
Selling your own property is a big undertaking, after all; so, chances are, they need to move because they got a job in another city, or they just bought a new house, or they are about to have a baby, etc.
But every now and then, you’ll meet someone is going through the steps to selling a house but isn’t super motivated. Maybe they’re just “feeling out the market,” trying to determine how much they can really get for their home.
To give them the motivation they need, you could do worse than to make a big, sweet offer.
When Another Buyer Has Made a Cash Offer
Finally, you may want to make an offer above list price if you know that another buyer has made an offer in cash.
Homesellers like cash offers because they can sell the place quicker, without having to negotiate as much mortgage company red tape.
You may not be able to make a cash offer of your own, but maybe you can tilt things in your favor by making a more generous offer overall.
Learn More About Real Estate Negotiations
As you can see, there are a few specific contexts in which it makes sense to offer more than the list price. You can always ask your real estate agent for additional guidance.
And if you’re curious about the steps to selling a house, we invite you to claim your SOLD.com report. In your free seller’s report, you’ll get personalized tips for selling your own property. Snag a copy of your homeseller’s report immediately, right here at SOLD.com.
