Would you ever pay over asking price for a home? You might think that the ridiculous question but in the Portland area, prices and inventory are not going hand-in-hand. Although we are not seeing the crazy bidding wars like they are in Seattle, Portland has its own share of inflated prices and the gap between the asking price and the selling price is widening. Many homes are selling anywhere from 5% to 30% over asking price depending on the location and where was originally priced. This begs the question, is it a good move to under price your home?
Many sellers are receiving multiple offers for their homes and in many cases, these are offers far above asking price. Many buyers are including an escalation clause, which agrees to pay a certain amount over the highest price up to a cap. In today's market, there are more bidding wars than any point in the last decade. The reason? Fewer inventory is driving those prices up. Now, this isn't everywhere across the Portland Metro area. But in 2016, real estate transaction showed that residential properties were going quickly for up to almost double the asking price. A look back at January 2017 stated that these homes were still 22% on average over list price. Some homes on Gladstone Street actually sold for 42% over the asking price in just one week and even smaller homes, some would call starter homes, are selling 20 to 30% over asking price.
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Are real estate agents just not pricing the homes correctly? This is probably not the case. It's not a wise move to over price a home to begin with because the appraisal may not justify the high market value even though people will actually pay for it. It's a fine line and a tricky balance to price the home where it should be hoping to get more. But does this mean we should underpriced homes in order to bump up the price even more? That's a risk that many sellers may want to take but probably shouldn't due to the high risk involved. Even foreclosures, ranch-style homes, short sales and more are selling far beyond list price but again, for a buyer to obtain a loan for this inflated amount the home would be to appraise for the higher asking price. If not, the buyer would need to come up with the difference. In a buyers market, the buyer could request the seller to lower the price but with multiple offers that simply doesn't need to happen.
If you're considering selling throughout the Portland area now would be a great time. But, it also comes down to getting the right agent that can price it accordingly from the get-go.
Give us a call today to find out how much your home is worth and if you could receive over asking price for your property.