I get great questions all the time from my home buyer and seller clients here in the Seattle, WA – Bellevue, WA real estate market. My goal is to help them learn and understand the market we are in so they can make smart decisions based on their own situation.
One client was recently discouraged after their first offer on a home got outbid. The question is, with multiple offers on the table, what price range should we be shopping in, in order to find the type of property we desire and get it under contract.
Seattle Home Buyer Question: As buyers with a maximum price point of $1.5 million, we just got outbid on a property listed at $1.25 million. This was discouraging, especially since we tried other strategies including waiving some of our contingencies.
What can we do to come out on top next time? Do we need to be shopping for cheaper properties? Some of the properties we looked at in this price range didn’t sell at all last week after the offer review date expired.
Real Estate Agent Emily Cressey Responds:
Dear Buyers,
Good questions about the price range you should be shopping in. Obviously this is somewhat unpredictable and it can be hard to know how popular a given home will be on a given weekend. In general, as we all know, we have been seeing homes get multiple offers and get bid-up, but this is not always the case.
How much a house will escalate will depend on a variety of factors including:
1) Location – how desirable is the area (e.g. “East side” is hotter than “Everett”). If you want less competition, try shopping in an area of town with more inventory and a slower market demand. The most competitive areas (right now Bothell, Bellevue, Kirkland, Kenmore, Woodinville, Redmond, etc.) tend to see homes get escalated higher above their asking prices.
2) How aggressive the starting price was – Let’s say “comps” for a given home are $1.3 million… the seller could have been overly-aggressive and priced the property at $1.4 Mil which will reduce the number of showings and offers, and may lead to a “stale listing” with no offers on the offer review date. Conversely, they could price it at $1.1 Mil to get a “buyer’s frenzy” and it will escalate to $1.5Mil. We have to look at the property and its price in context to know if it’s likely priced at a level that will see a strong escalation.
3) The Market Speaks – The most I tend to see homes in this price range escalate is about $400K. So… if you want to be “safe” you could look at homes priced at $1.1 Mil or less and have a good chance of them not going out of your price range. For example, we looked at a $700K property in Renton last weekend (that you didn’t like) and I’m confident it did not sell for over $1.5 Mil. However, as your wife points out, you will likely see a few deals priced above $1.1 Mil, which you would be capable of snagging if you were so inclined.
I would recommend keeping your parameters open and finding the homes you like best, I can advise you on a case-by-case basis, but given that we are still early in the process, I would wait a few more weeks and make a few more offers before you cut yourself off from the potential upper end homes and just buy something listed for less… it depends on your own level of urgency and patience with the process.
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