As the owner of a Beacon Hill condo, you should not be surprised to get multiple offers when your condominium is listed for sale. For many housing markets across the United States, bidding wars among prospective buyers have been called the “new normal” of real estate transactions since 2016, and this trend is bound to continue in Beacon Hill this year. With market conditions favoring Beacon Hill condo sellers, there are a few things that may happen when your unit hits the MLS.
Understand Bids Do Not Equal Purchase Prices
For the most part, Beacon Hill offers made by buyers are conjectures that may not always reflect the actual and final sale price. Keep in mind the highest bidder is only trying to move to the next stage of the buying process, which would be to sign a purchase contract, and which will likely involve pricing negotiations. It is not unusual for buyers who win bidding wars to lower their offers when the contract is drafted. In fact, you should expect to settle on a realistic price that is lower than the highest bid.
Get Real Estate Representation
Some Beacon Hill condo owners erroneously believe a seller’s market will enable them to list their properties on a For Sale by Owner (FSBO) basis, thereby forgoing a listing agent. However, this is a poor strategy that often ends up attracting the wrong kind of buyers who may have ulterior motives for engaging in bidding wars. In recent years, studies by the National Association of Realtors indicate that FSBO transactions close 13 percent lower than those handled by real estate agents, and these listings take six weeks longer to close even when market conditions clearly favor sellers.
Remember Price Is Not Always Everything
Beacon Hill real estate professionals tend to approach outlandish bids with caution. Prospective buyers who enter very high bids could be putting themselves in a position that stretches their finances, therefore reducing the chances of getting a mortgage approval. It is more important to consider bids from buyers who bring plenty of cash to the table. These may be foreign investors who know the lender will only grant them a 50 percent loan-to-value ratio mortgage, which are usually easy to approve.
Research Real Market Conditions
When the Beacon Hill condo market heats up to the point of resembling the trading floor of the New York Stock Exchange, every homeowner becomes a property investor, and this is when it pays to have a professional by your side. Shrewd bidders may have contingencies that extend the closing. This tactic is used by investors who want to buy time and wait for the market to heat up even more so they can become flippers. Real estate agents keep their fingers on the pulse of the market, and they will let you know when certain bids are more beneficial even though they may not be the highest
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