Whats the best way to compete in todays market for a hot location with other high net worth competitors? Our realtor claims that the location we are considering is still going over asking price even in this environment but we are not quite sure whether we should offer over asking because there are a couple dealbreakers in the house. Are people still offering over asking tor sought after locations?

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I am under contract as we are speaking. Was in a similar boat but remember one can never time a market. If you like a house (not something with a dealbreaker) and have cash, this is actually a great time to buy a house and negotiate. Here are my pointers for a single family house in a great school area in NJ:
1. House was on market for more than 180 days - it’s a new construction
2. Original list price was 1.5M, dropped to 1.4M - gave us an idea that builder might be up to open for price dip
3. Talked to our realtor and we started negotiations with 1.25M ;) and asked for upgrades worth nearly $35K
4. Eventually settled at 1.3M with all the upgrades ;) . Turns out the builder just wanted to close the house before spring market - we gave that flexibility to him
5. No other waivers - going through regular inspection and appraisals - peace of mind!
In a usual buyers market, we probably be never able to get 200k below LP and with $35k worth upgrades because others might have outbid us.
I am happy to share any other details if you’d like. Good luck!

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congrats BC1 -which area/location?builder?
I am also considering buying but not babla to break the ice.

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Why would you put in any offer if there are dealbreakers by definition

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Low inventory is not a dealbreaker. If you can wait just wait. Otherwise you’ll hate the place you end up with and overpay

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If there are “dealbreakers”, then don’t bid.

But if there are less desirable attributes that you’re willing to overlook, the key to winning a bid in a competitive situation is to understand what the seller is looking for. Is it price? Is it speed to close? Is it a non contingent offer? Is it a lease back? A good buying agent will be able to help you determine what will be most attractive to the seller.

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Less desirable attributes we are willing to overlook - thats the perfect way of putting it😊 thanks for the great insight!

Just wait. This is not the time to buy at all.

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The person in charge of directly influencing mortgage rates (J Powell) literally said that these a short-term fluctuations. And then he increased the interest rates by another .25 basis point while announcing at least another 2 of these. Bubbles can’t inflate forever.

I bought in a hot area in 2021. We lost our first 2 bids with offers 14% over asking. In third we used an escalation clause, indicated that we would remove all contingencies within 7 days and made a large earnest money deposit. We also said that we would not ask for any corrections or credits based on the inspection and waived any appraisal gap contingency.

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We had to cover a $90k appraisal gap to close. Although we knew it wouldn’t appraise and had planned appropriately.

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In the northeast, appropriately priced homes still sell for about 10-20k over asking, Even more for some homes. Theres just not enough inventory. And rents are high

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Just bought a house, over 40K asking. Had 6 total offers. We won even though there was a higher offer because we talked to the listing agent to better understand the seller’s needs (in our case we gave sellers 2 weeks rent back and closed within 14 days)

uplifting

What area?

“Even in this environment”…are you referring to historic wage growth, 3.4% unemployment, and a stock market that just jumped 15% over the past few months?

Mortgage rates that jumped from 3 to 7% in a month

How long do you think that this madness can continue. This is just mind-boggling to think it is still happening even after interest rate hikes.

Prices will only go down if there’s not enough buyers for the available supply. In many markets and sub markets, there are still bidding wars because of high demand and low supply. If someone wants a house in a specific school district, and there’s only 1 or 2 on the market, the list price is just a suggestion.

Will prices go down across the whole of all markets? Very likely yes. Does that mean every house will go down in price? Nope.

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For those questioning and ridiculing the decision - if you read my original question again - it is not whether to buy or not, so would appreciate if you keep your opinions to yourself and answer the question only if you have any valuable insights

Thanks

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