Bidding above the asking price is still common. In large cities in particular, outbidding is sometimes necessary to have a chance at a home. We give you the do’s and don’ts of bidding above the asking price.
The main reason why houses are sold above the asking price is the scarcity in the housing market. Especially in the Randstad there is a shortage of new supply. As a result, people have more money left for a home. In addition, interest rates are still attractively low, an important reason for many people to want to buy a house.
When you have found your dream house, you naturally want to make sure that you offer enough so that the house does not pass your nose. Still, it is important to keep your head cool. But if you’re going to outbid, what are you paying attention to?
Agree a budget with yourself and don’t go over it. Calculate in advance how much you can borrow and what your monthly payments would be with that amount . Do you feel comfortable with these loads? Or would you prefer to keep your budget a bit lower so that you have more money for other things? It is important not to cross your own boundary as you may regret it later. There will of course be a house on your path that better fits your financial picture. It is also wise to go below your maximum budget with your first bid. This gives you room for negotiation if the sellers come up with a counter offer.
Money out of Pocket
Remember that you have to pay a (large) part of the amount that you offer above the asking price out of your own pocket. before offering you need to keep in mind your finance needs such as if you have to reserve money for additional costs, such as transfer tax and notary fees. In addition to that you need to pay for building and pest inspection ,stamp duty, conveyancing fees, loan insurance fees and the like.You also want to have some money left to furnish your new home. So never offer more than you have available with your own money!
Look at the Future
The housing market is always subject to wave movements. Of course you don’t want to be left with a huge residual debt in a few years. Overbidding can put you at risk. How much you offer also depends on your future plans. Do you want to live in this house for the rest of your life? Or is this a small starter home and is there a chance that you will want to move again in a few years to start a family?
A professional can help you with this difficult process. Talk to a mortgage adviser. You can always make a first appointment without obligation at a Best Mortgage team. Also a good buying broker is not a waste of money. The real estate agent keeps track of which homes are available for you and can help and advise you during the negotiations.
Good luck with the house hunt!