The One Reason Why You Should Offer To Buy A Home Over The Asking Price

Offering above the asking price might seem counterintuitive, but in this market, there's one smart reason to do it — to stay ahead of the game. Besides, let's face it — the "asking price" doesn't mean much anymore. If you've been house hunting lately, you've probably noticed a frustrating pattern: Homes are listed at one price, but they never sell for that price. Instead, you see some version of "Sold for $25,000 over asking" again and again. The market can really be that competitive. As a matter of fact, 31% of homes were sold above the asking price in 2023.

In many areas, sellers and real estate agents tend to list homes slightly below their expected value to catch attention and create competition. Once multiple offers come in, buyers start raising their bids to stay in the game. Before you know it, that "affordable" home you toured last weekend is gone, and someone else has landed it with a stronger offer.

After losing out a few times, you may start to feel the pressure. You've found your dream home once or twice before, only to see it slip away. So, rather than try to successfully lowball a home-buying offer, you bid higher the next time in the hopes of finally getting your hands on the house you want. But paying over asking doesn't mean you're overpaying. In many cases, the final price simply reflects what the property is really worth in a hot market with fierce competition. If you're holding back, someone else might act faster and snatch up the property you had your eyes on, especially if options are limited in your desired areas.

The real estate market moves fast, with prices often rising month after month. What looks like overpaying right now may seem like a bargain in a few months. It's worth mentioning that U.S. home prices are constantly recording all-time highs, as costs jump a few percentage points every year. So, waiting could actually cost you more than acting now no matter what. Every month you spend searching for what you think is a good deal is a month where prices can climb and interest rates might change. A slightly higher bid today to beat out the competition could mean locking in a lower mortgage payment and starting to build real estate equity now.

Also, in a seller's market, it's not always the highest bid that wins — it's the strongest offer. A bid that's slightly above asking, along with good terms, closing time, and real estate contingencies, shows you're serious about your offer and willing to make the process more agreeable for the seller. This can help you seal the deal even against higher offers. Overbidding brings peace of mind, too. Offering a little more for the right property could save you weeks or months of frustration. Of course, this doesn't mean you should throw money around. It all comes down to strategy. Do your homework, and work with your agent to decide when a slightly higher offer makes sense. If houses are only on the market for a few days, listed prices are competitive, and you have the financial breathing room, starting high may give you that crucial edge. It doesn't even have to be your dream home. You can buy what's affordable now and use that property as equity to eventually get the one you actually want.