How To Budget In Today’s Wild Real Estate Market
If you’re buying a home in this tough Colorado real estate market, you may find that going above the asking price is a must-do. It used to be that you would create a budget and look at homes under that amount. With the way today’s market works, that may not be the best way to approach your home search.
According to the National Association of Realtors, homes are receiving an average of 4.8 offers. In Denver and Boulder, homes are selling, on average, for 6% above the asking price. This means that coming in at the asking price will probably not get your offer accepted, and you’ll have to come in higher, which may make a home that is listed as within your budget a little bit out of reach. So, what should you do?
How To Budget
There are many factors to consider when making your home buying budget. It’s best to get pre-approved with a lender before you start to look so you know the maximum amount you can spend. In today’s market, you need to keep in mind that the list price you see is more of a starting point than the price you’ll end up paying.
Since homes are selling above list price, if you want to play it safe, you may want to cap your home search at 10% less than you are able to afford. That may seem frustrating, but what is more frustrating is missing out on a home because you receive a counteroffer that is just outside of what you are able to pay.
What To Offer
Deciding what to offer on a home you love is a challenging topic. Really, every situation is different, but generally speaking, you need to come in at or close to asking. Now is not the time to lowball or try to get a “deal”. Doing that will most likely get your offer thrown in the garbage. At the same time, it may not be the best idea to go all-in on your first offer – that could cost you a lot more money than is necessary.
The Colorado real estate market can change quickly. We are starting to see more inventory which will hopefully give buyers a little more room to negotiate. Overall, keeping up to date on current market conditions is crucial to making a well-informed offer. Real estate professionals know the current market trends and can use their expertise to make your offer the one that stands out from the crowd. Having a real estate professional by your side will allow you to take the guesswork out of making an offer.
We Are Here For You
If you’re looking for a real estate professional to guide you through the home buying process, look no further! Give us a call so we can work together to get you into a new home. We know the Colorado real estate market inside and out and will make your home buying experience as smooth as possible.