Nov 06, 2007

Not All Home Sellers Are Desperate -- Know Your Market!

A two-bedroom, modest home in my neighborhood just sold for $55,000 over the asking price, after receiving several bids. And yes, I did write this in November 2007, when the national headlines were full of nothing but doom and gloom about the housing market.

I can't help wondering whether some of the people who were outbid were relying on those national headlines. I know for a fact that at least one of them bid at the asking price. Perhaps they hadn't really done their homework about the local market, where competing bids at far over asking price continue to be a common (and frustrating) feature of homebuying.

Home prices have actually risen over the past year in five of the 20 cities studied by the widely followed S&P/Case-Shiller Index. These include Atlanta, Charlotte, Dallas, Portland, and -- with the biggest gains -- Seattle.

But plenty of cities aren't covered by this study, and even regional trends don't tell the whole story. That's why it's important to get to know your local market -- even at the neighborhood level -- before bidding on a house. Go to open houses and quiz the selling agent about how many offers they anticipate, ask your agent to pull up actual sales prices on comparable houses sold within the last few months (or research these yourself on sites like Zillow), talk to the neighbors, read the local headlines, and more. Then you'll be ready to submit an appropriately priced and crafted bid.

To learn more about how to assess the market in your area - or even somewhere you've never been - check out Nolo's Essential Guide to Buying Your First Home, by Ilona Bray, Alayna Schroeder, & Marcia Stewart (Nolo).

Ilona Bray