Hi everyone! It’s been awhile since I’ve sent out a Monday Morning Mojo update (rather than my regular Market Trends emails), largely because this last year has been CRAZY busy. But it’s a snowy day, I feel like writing, and it’s about time!
So back to the headline.… Last spring my wife and I paid $15k over asking price for a Talkeetna property. Why? Crazy?
I’ve advised buyers over the years in multiple offer situations that, since they don’t know what other buyers are offering, the best approach is to determine at which price they would be comfortable walking away from the property, and then offer just below that. This gives them the best chance of getting the property, without paying more than they are comfortable paying. Obviously a great deal depends on the property, how much the buyer really wants it, etc.
So back to the new Talkeetna property. I had just set up a personal search for investment properties a couple days before with automatic notifications for properties under $200k. An email came in for a home and cabin under $200k, and the seller was willing to offer owner financing. Lauren and I have crunched the numbers on a bunch of properties over the years, and usually they just don’t seem to pencil out to her (she’s my in depth numbers person). But this time, she couldn’t find anything wrong with it which was promising.
We drove up right away and checked out the property. The property was, if anything, better than expected. The house was rented out and the cabin was ready to Airbnb. We wrote an offer. Two other offers were also received by the seller. We upped our offer considerably, waived certain provisions, and sweetened our terms. And … won!
The property has been awesome so far. The cabin was booked solid throughout the summer and fall, with a good amount of bookings through the winter, and next summer is already filling up!
When should you consider paying above asking price?
– If you know you are competing against other offers
– If you know the market, market prices, and availability of a particular type of property
– If it makes sense after you crunch the numbers, if you’ve crunched the numbers on a number of other properties, and if you know at what price the property makes sense for you
– When you are not fixated on the list price, and realize that it is fairly irrelevant to the actual market value
– When you understand you are currently in a hot seller’s market
If you have any questions on purchasing a property, investment properties, or what’s involved with running an Airbnb, I’m here for you!
Advantage Alaska Real Estate
“Your home sold in 90 days, or I’ll sell it for free!”
P.S. ~ My goal is to always do an excellent job for my clients. If I’m doing a great job for you, please consider passing my name on to others who are looking to buy or sell real estate in the local area.