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Why are buyers paying above the asking price?

In a fast moving market with strong appreciation, buyers can feel rushed and anxious when they realize they have to bid higher than a seller’s asking price or more than the appraised value to get the home they want. 

Today’s buyers are paying above the list price because…

a) buyers are locking in a once in a lifetime opportunity of historically low interest rates
b) buyers are going to ride the wave of appreciation for the rest of the year and beyond
c) buyers desire to be in the right place post-pandemic!
d) all of the above!

But my friend said…

Sometimes a buyer’s friends or family give advice that makes a buyer question the current market. A well meaning friend or family member might say… 

I have never paid over asking price and I’ve bought 10 homes in my life. You need to negotiate a better deal than that! No one pays over list price!

That friend or family member is likely not up-to-date with the current market. Sometimes they will bring up things that can make a buyer fear jumping into this market. Especially right now, buying or selling a home in today’s market is not the time to use a friend or family member without experience just to be nice, or to use a newer agent or someone who is a part-time agent. There is simply no way to be an expert in this unique market without being in the trenches daily.

How is the market today?

Many areas in our East Valley market are seeing consistent appreciation rates. For example, homes in Phoenix metro grew on average 2.7% from March to April 2021, meaning a home sold in early March for $349,000 grew to $358,250 by early April. Our market analysis clearly show strength in the local real estate market. 

Interest rates are also at historic lows, and expected to rise, which significantly impacts buying power. If rates go up 1%, instead of being able to buy a $300,000 home, a buyer might have to lower their price range to $270,000 to have the same monthly payment, due to paying a higher interest rate. 

Why is this happening in Arizona?

We believe Arizona’s pro-business environment and diversified economic base bode well to investing in the East Valley real estate market. Home prices in Mesa, Gilbert, Chandler, and surrounding areas are relatively affordable compared to most other large metropolitan areas of the U.S. 

Our team at Klaus Team Real Estate Services has navigated every possible type of market over the past two decades, and sold thousands of homes. We rank among the top teams in Arizona as well as in the US. We have hundreds of five-star online reviews from past clients.

Why should I work with the Klaus Team?

  1. It is extremely important to have a trusted professional with a proven process to help you navigate and win the home you want to win in today’s fast-moving, high-stakes market. 
  2. Our secrets to success include providing more solutions and strategies than anyone else to help you win competitive multiple offer negotiations in this market, whether you are a buyer or a seller.
  3. For clients who commit to working with us, by signing a listing agreement or a buyer brokerage agreement, we share those options to help you craft a custom solution to fit what matters most to you. 

What matters most to you?

For some clients, money matters most. And for some clients, convenience may matter most. For others, the timing of a major move is more important. And other clients want certainty so they know it will be a done deal, with no surprises. 

We recognize that every client and every sale is unique to that person. And real estate is about more than just buying or selling a house. It is about what matters most for you and your situation. Ultimately, we believe real estate is about making life transitions, not just financial transactions.

Those life transitions play a large part in choosing to move and choosing how to craft an offer and negotiation strategy. What matters most is a personal thing, based on the life transition involved.

  • Buying a first home to build a stronger financial future. 
  • Finding a house with a big fenced yard for your fur babies.
  • Moving as a widow to be closer to family.
  • Getting enough bedrooms for twin babies expected soon.
  • Selling the old family home after probating the will.
  • Getting married and building a new life together.
  • Selling a big home to downsize and travel as empty nesters.
  • Building a solid financial future as an investor by owning rentals. 

After coming out of a challenging pandemic year, often with much soul searching, many people are ready to move forward with life and get in the home they want to stay in for a while. That’s why it’s very important to review why it makes sense to buy now or wait. 

Are you ready to talk?

We’d love to meet with you for a free, no-hassle, no-commitment consultation to answer your real estate questions, hear about your hopes and vision, and help chart a course for you on your next home transition.