Profile picture for peaceunlock

Is it normal to offer more than the listing price on a house when making an offer?

Hi there, first time home buyer here and I had a few questions because I am heavily depending on my real estate agent, but he doesn't seem like a reliable person.

I've been looking for a house around the 350k - 400k range and plan on putting 100k down. My agent says its normal to offer more than the listing price on a house or else my chances of purchasing that particular house will be very low. I still don't understand how that would be the case for a house that has been on the market for such a long time, but I've been making offers several thousand dollars more for houses I am interested in, but my agent still informs me that the house was sold to another party.

The reason I ask is because today I asked my agent if I would be getting the house I made an offer for in Sunnyvale (the second house I've made an offer on in Sunnyvale). He told me that it had been sold so I tried to confirm the address with him and he seemed a little confused at first and wrote down the address and began to think about it for a minute. He then confirmed that it had been sold. It is still listed as active on another site but I know things can take time to update online.

My agent also seems to have a i-don't-want-to-be here attitude. Now I'm certainly not expecting great customer service or even a friendly person, but he just isn't that helpful. I don't have experience at all with any other agents but when we arrive to look at a house, he opens the door to let us in and look around the house while he waits outside. He doesn't even greet us, which does not bother me but could be an indicator of how helpful he is actually being.

Thank you in advance for your thoughts and advice.  
  • April 22 2011 - Santa Clara
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Answers (24)

All agents have their own style that may work with some people, but not with others. The most important component of any relationship is trust. If trust is lacking everything comes under question and few issues get resolved. Answering your question, yes in certain markets paying above asking price does happen. If your agent represents you he/she should be able to show why properties have a certain value. Your agent should give you a comprehensive market analysis demonstrating current property values and market trends.That is their job. If you are not represented maybe you should be.It's best to work with someone you trust and our comfortable with maybe you should speak to the agent to make sure you are both on the same page.
best of luck
  • February 14
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Hi PeaceUnlock,
I'll address your 3 concerns in order:
For your first concern about whether to offer above or below list price, it depends on the situation.  A good realtor should be able to give you some guidance on which homes require you to bid over asking and which do not.  A good realtor takes all the information into account to help you come up with a good price to offer.  Some of the information we take into account are past sold prices of similar homes within recent months, how long the home has been on the market, how many other buyers are interested, etc.

Regarding your second item, I'd give a pass to your realtor on that one.  He is correct that some consumer sites do not update in a timely manner.  When he said he was "thinking about it" he probably was really checking the status on the official MLS.

For your third item, it depends on your preference.  Your realtor should have better communication with you to know your likes and dislikes.  Some buyers want to have their realtor look around with them, some prefer to have privacy and look on their own.  Your realtor should ask you, or at least read your facial expressions and body language to figure out which way you prefer. 

Bottomline, he might be a good realtor for someone else, but sounds like your realtor doesn't match with you.  Sounds like he doesn't have the patience or desire to work with first time home buyers.  For some of us, it's not about dollars and cents.  Sure, from a money perspective, first time home buyers take the longest, require the most work, and pay the least, but some realtors forget that we also do this for the joy of helping people get their first home.
  • February 14
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Profile picture for andrew597

Wow!   Peace, it seems as though you may want to discuss your agents "style" of showing with his broker.  Personally, when a client enters the living room I give them about two paragraphs of verbal info with regard to the subject property, neighborhood, and area, then I walk behind them and let them taking note as to what they like or dislike about a particular home.  Simple Job LOL

 

Your agent should be concerned about your likes and dislikes, so that he can help narrow the search and save time / money.  He should also be concerned about the liability when showing a property LOL.

 

NOW FOR YOUR REAL QUESTION:

Certain markets are heated and certain markets are cold.  Some sales are bank owned, some sales are short sales, and some listings are undervalued.  Have you been targeting undervalued property?  Undervalued property may have been listed lower than the market will bear in order to create a bidding war or at least a higher offer.  Many times a short sale or pre foreclosure listing will be listed well bellow market value, so that potential buyers will bid the highest price, which still must be approved by the current owners lender or the bank in the case of a bank owned. 

 

Heated markets, such as certain areas in both Florida and California, also command higher than listing price in order to attract the seller.  He may be right in asking you to offer more and he may be attempting to increase his commission.  Use zillow and determine how long homes are on the market in your target neighborhood.  Markets selling less than 30 days on market would command higher than listing price, however, if you are seeing over 90 days on market, offer less than asking price and begin negotiation.  Less than 60 days on market but no more than 90 days, present a comfortable offer.

 

That is my 2 cents. 

 

Andrew Cherry

  • February 03
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List price should be assessed with selling price and Market trend. In this market list price is a joke to advertise I sold 100k more than asking. Think about it if you don't know the market you will list low. Then buyers who are new placing offer do not get the game, and takes them time to get a home. If you are having trust concern with your realtor you need to clarify and resolve your opinions , if not then find the one that can explain you the different market.
  • February 03
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Profile picture for Kim Ketcher

It is normal for people to offer over the amount of the asking price if they feel it is very desirable and it will go quick. That is where a good agent comes into play by advising you of this. You should have your agent do a CMA to see what the actual "sold" properties have been going for in that area. It sounds like you might want to speak to your agents broker and express your concerns. The broker would be able to match you with someone that is more suited to your needs.

  • May 02 2013
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If this is a "hot" property, with other bidders, than it is not unusual to offer over full price...but everything "just depends" and you do not have a good agent helping you.

Find a buyers agent that is experienced in representing home buyers and their majority of business comes from buyers.

Eve
  • May 02 2013
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Profile picture for JamesHook
Sure, if you really like it and you and your Realtor think it will appraise for the amount offered. If you are paying cash, congratulations, offer anything you want :)

P.S. Find a new agent, yours sounds lazy and not helpful.
  • May 01 2013
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To answer you question.  After 32 years of seeing it all, it depends.  In my area, we have low inventory and prices are going up at a good pace.  So, if the home is priced right, it's not uncommon to have multiple offers and houses selling at higher prices than listed. This is what we call a 'Sellers' market.  Even though, pricing may still be upside down to what it was in the past 'Sellers' market.  We've had a 'Buyers' market for quite some time.  We also call it market correction. Sellers sell high, then, buyers buy low.  The ebb & flow of the economy.  So, set your priorities on your needs, wants and what you will pay for those.

As far as you agent goes.  Have a heart-to-heart with him. Let him know your concerns and that you may be looking for another agent.  If you have a contract, you will both need to mutually agree to cancel it, or, you can request a cancellation from his broker.

Good luck on your home buying journey.
  • May 01 2013
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First of all, fire your agent, and find one who works full time and is a professional, maybe even with some designations. Depending on your market, you may very well have to pay more than the asking price if you really want the property. This is not usual, but does happen from time to time.
  • May 01 2013
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Profile picture for SteadyState
Think of the listing price as equivalent to the "MSRP" (manufacturers suggested retail price) for a car. Pay what the property is worth (true appraisal value) and then you need worry about the sticker price - offer more if the listing price is under the appraised value and offer less if the listing price is over the appraised value.
  • May 01 2013
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Profile picture for Tony Ngai
In Sunnyvale, this is one of the most competitive zip codes besides Cupertino and Saratoga.  I've submitted 4 offers for one client in April, approximately 5-7% over asking price and everytime, we were outbid by either cash offers or higher bids.

Your agent should be able to pull up CMA - Comparable Market Analysis to see what the market is currently selling for in the particular zip code.  With the CMA report, you will see the final sales price versus the list price and the price per sq. ft.  Keep in mind that these numbers are just the measuring gauge for the past sales.  The current market price is going to be driven by high demands and low inventories.

  • May 01 2013
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Profile picture for user5900682

Living in California, offering on houses that are $200k, the final amount after the some 60 odd offers they receive will be around $260k... why? People are stupid. (this seems to be the norm in Pomona, Riverside, Corona, Anaheim (no $200k values here) and area's surrounding...)

Same scenario, house listed for $250k, the final amount shows sold for $325k... People need to stop offering such obsurred amounts over the listing price. Its rediculous.

I'm not the greatest speller with out Microsoft word, so excuse the bad spelling that may or may not exist here.

We've placed 62 offers in 2 months on houses that range from $180k to $250k... we've placed offers on housees for $230k when the listing price was $180k and still turned down, some with 5% down payment, some with 20%. its BS. I at first thought it was just our realtor, but he has sat down with us through the process for the last 40 offers we've placed.

It's the market, as long as these idiots are placing $35k-$75k more than the listing price, you should be looking for $75k less than what you've qualified for, but putting those offers in $50k-$75k more than the listing price if you really want to get a place.

  • May 01 2013
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Profile picture for SteadyState
Is it ok to offer the drug dealer over asking price for the drug of your choice? The dealer will always say yes.
  • June 02 2011
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If this property is a Short-Sale..your agent is 100% correct,most short sales do sell for over the "asking" price.
You should expect great customer service and a cordial person to work with! There are so many really excellent and well trained agents out there, there's no reason to put up with this kind of treatment. If I were in your shoes, I would get another Realtor to work with right away!
  • June 02 2011
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If a Real Estate professional is not doing his job, then find one who will! There are hundreds that would work extremly hard to help you buy a home. It is not NORMAL to offer over list here in WI but it does happen.
  • June 02 2011
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You need to ask more penetrative questions, How many offers were received? What the price range were the offers?. If in doubt you can call the listing agent to confirm the data.

It may be the chemistry. As a realtor I try to show new listings esp in Sunnyvale as few homes stay on the market more than a few days, even if it is priced high. Some agents are also appraisers and they can tell you the fair value and suggest if you can make offer lower or higher.  With Sunnyvale homes a skilled agent can spot most problems and even give you an idea about repair cost, termite and noise(air plane zone). Standing outside and not want to get to the bottom of issues(plumbing, termite, attic)
 is problematic. A good agent will even crawl inside underside or looking into attic see signs of defects.  
 
  

  • May 29 2011
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Let me start by answering your question of whether it is normal to offer more than the listing price. The answer to that is no it is not normal.

Only in a non-normal situation would you be making an over asking price offer such as a really great school district, multiple offers, a fully remodeled house etc.

So how do you decide if you should be making an offer higher than their listing price? This is where a good agent comes in, they should be gathering information from the listing agent like number of offers received, amount of repairs needed, and showing you the comparable properties. 

Sometimes making an over list price offer makes sense, sometimes it doesnt. Remember the seller is not always looking for more money, they may have personal issues going on like a divorce or a relocation where the time it takes to close is actually more important. In this situation an all cash offer or faster close could be more important than more money. 

Hope this helps you out Peaceunlock!

For more resources for first time home buyers in the Bay Area check out my blog [website removed by Zillow moderator]
  • May 23 2011
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This person stands to make a decent chunk of change for "helping" you, so he better treat you with proper customer service.  There are plenty of more capable Realtors who will be glad to help you out.  Don't trust ads, get a referral.  Perhaps check a few of your local BNI chapters and ask around (BNI.com)

As far as your first question, what you offer depends on a lot of factors; Is it a bank owned home, short sale, normal transaction?  How long has it been on the market?  Have there been price reductions?  What is demand in the neighborhood?  These are questions that a good Realtor should be able to answer for you.

As an appraiser I can suggest that perhaps you should contact an appraiser on the next home you are interested in- BEFORE you place an offer and ask for a simple and inexpensive desk review.  Explain exactly what you're looking for and any good appraiser would be able to help you out to let you know what they house is worth approximately.

Good Luck!  And fire that Realtor
  • April 23 2011
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Please call another agent, your agent has a fudiciary relationship with you and needs to be putting your needs first and foremost.  Not all offers need to come in above asking price, if the seller doesn't like the offer the will counter.  You are NEVER stuck with a single agent.  Call another and voice your concerns.  However, if you are still interested in that home you need to communicate to another agent that you were showed that home by your previous agent.  If it was sold don't worry there are many to choose from.  I'm sure your new agent will work on your behalf.  Good luck!
  • April 23 2011
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I would say if the property has been listed awhile more than list price isn't reasonable unless they recently did a price drop.  You might want to make sure the listing agent / firm is not the same as he is.
RE is the other property sold??? GO to REALTOR.com and check and see if the status is active or back up etc.   If it is active you might want to pursue that a bit more by looking in to it.  maybe call the listing agent yourself just to verify.  By the way if you don't feel comfortable with your agent at this point perhaps looking at other properties with another agent might be the cup of tea for the day.
  • April 22 2011
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I strongly suggest you look for another Realtor to help you right away. No Realtor should unlock a house and then stand outside while you go inside and view the home. He or she would probably get in trouble for this practice as your Realtor has a professional responsibility for keeping each house secure while he is showing it. What if you were a thief or a vandal? While he is standing outside you could be stealing prescription drugs, unlocking a back door so you can come back later, or doing some sort of damage to the property. Just like in any profession not all Realtors are created equally. Find a new agent.
  • April 22 2011
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Profile picture for peaceunlock
I couldn't find an edit question button so I'll post here.

He was the agent responsible for selling the first house I was interested in and ever since then he has been the one helping me find houses. I tell him the address of the house I am interested in and he makes an appointment with me to go view the house. 

Thank you so much for your help. You guys do not know how helpful your advice has been.
  • April 22 2011
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Peaceunlock

A question, 
Where and how did you meet your agent?

Based on your description, I would look for a new agent.  As for offering over the asking price, that's only common or "normal" when the property is fresh and listed at or below market value.  If there are several buyers circling about, offering higher may give you a better chance at acquiring the property.  If the listing is stale and you are going to be the only offer on the table, there is no reason to offer more than the asking price.   If anything, you would offer less.

Oggi Kashi
Paragon Real Estate Group
CA DRE 01844627




  • April 22 2011
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Thanks for your question.  So many things to comment on...."is it normal to offer over full price?"  No, not normal but it certainly does happen. 

The biggest thing that bothers me is that you are not comfortable with your agent.  How did you get him?  If you are so uneasy, I recommend working with another one, we have all been fired before BUT he may make up in the negotiation dept?!  As for showing homes, every Realtor does it differently.  I go to seminars and classes all the time and have had very successful agents tell us different ways and one opened the door, lit up a cigarette and told the buyers if they need him, let him know!!  It worked for him, some buyers like to walk through as a couple as it is a big deal looking at houses to buy together.  I like to walk through separate from my buyers so I can look at possible problems.

It does take 30-45 days for a closing to take place and that is when it is recorded.  If you are not sure, e-mail the listing agents of the properties in question or have your Realtor e-mail you the listing showing it's status.

Good luck, hope this helps!
  • April 22 2011
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