The competition in the real estate market is pretty tough for buyers, especially because of the tight inventory of homes for sale in the market. This can result in bidding wars, which can be frustrating to most buyers. While a bidding war can help you win the house are aiming for, is it better to lose in the bid?
It is a seller's market out there and prices of homes in the market are continuously on the rise while the inventory of homes for sale remains low. This tight inventory has resulted to sellers receiving multiple offers and buyers engaging in bidding wars.
As previously reported here on Realty Today, the tight inventory of homes for sale in the market and the resulting bidding wars has caused frustration to the majority of first-time buyers. Such buyers would have to compete against investors who have more cash to pay for the down payment and who have better credit scores.
However, Realtor.com notes that being outbid on a home is nothing to be worried about. As a matter of fact, being outbid may have saved you from losing more money later on.
According to the publication, a lot of buyers have a fear of rejection, which results in bidding for more than what they initially planned. Buyers would then realize later on that they have paid more than what they can only to win the bidding war.
"It's very easy to get overheated or overexcited. But when the dust settles, all that matters is what the property is actually worth and what you paid," said Seth O'Byrne from the O'Byrne Team in La Jolla, CA.
In order to avoid paying for more than what you can when buying a home, it would be best to take a look at your finances before entering a bidding war. Buyers are advised to set limits beforehand and inform their real estate agents about such limits and never be afraid of being outbid.
