What Local Realtors Don’t Want to Admit (Myself Included!)
You’ve probably seen Realtors advertising sales at 10, 15 even 20% over asking price. Given how hot the market is, you’re probably seeing this now more than ever. And truth be told, I’m as guilty of it as anybody. Maybe even more so.
I’ve always assumed that selling a house for 10% or 15% over the list price is pretty compelling stuff, and a great way to prove my value. But recently, I’ve been thinking about this more, and I’ve got doubts.
Why? When agents advertise that we sold a home at 15% over asking price, we’re implying that we’re 100% responsible for that amazing outcome. If I force myself to be completely unbiased and objective, it’s clear that I’m not 100% responsible for any outcome, especially nowadays.
There’s actually a host of factors that come into play when a house sells for so much more than the list price in this market. Some of those reasons are listed below.
For one, interest rates are shockingly low.
We’re talking once in a lifetime low.
Buyers are extremely motivated right now. Add in the added demand that’s being brought about by COVID, and you can see why the market is so active. It’s created a unique and powerful sense of urgency for buyers. They want to secure a home they can comfortably work out of and feel safe in with their family, while taking advantage of historically low interest rates.
On top of all of that, there’s a serious shortage of housing inventory.
All of these factors are combining to create market conditions that regularly lead to bidding wars. And these bidding wars can sometimes push home prices up hundreds of thousands of dollars over the asking price.
Now don’t get me wrong. A highly skilled real estate agent can absolutely impact how much your house sells for. But that agent’s skill set is just one of many important factors that are causing some houses to sell for 10, 15, or 20% over the list price in this current market.