With the bidding wars buyers are experiencing in the Morgan Hill and San Jose real estate markets, should they lower their search price BELOW what they can afford (or are qualified)?
An interesting question worth considering in this real estate market where cities like Morgan Hill, San Jose, and most of Silicon Valley are experiencing a historically low inventory of homes for sale and homes routinely receiving multiple offers above list price.
As real estate agents, we typically talk to a client looking to buy a home to understand what they are looking for in their new home, for example, number of bedrooms and bathrooms. We also discuss price, which often times is determined by their lender after verifying income, assets, credit and other items prior to issuing a loan preapproval letter.
Real estate agents will usually then setup a home search using this criteria, but often times use a higher dollar amount than the approved amount from the lender.
Why would they use a higher amount than what’s been approved by the lender?
The reason searches are setup using amounts higher than the lender states in the preapproval, is there is an assumption that some homes are overpriced and can be purchased below the list price. On average, the selling price of homes tend to be 2-4% below the list price. However, in the current real estate market, many homes are selling above their list price.
With that said, I wouldn’t suggest lowering your search price, and would continue to search for homes priced 3-5% above your maximum purchase price. Homebuyers just need to keep an open mind and understand that in the current Morgan Hill and San Jose real estate markets, some homes are going to sell above the list price.
Showing properties
1 - 3 of 81.
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(all data current as of
6/19/2013)
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$1,400,000 : 1875 Silverwings Ct, Morgan Hill5 beds, 4 full, 1 part baths
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$425,000 : 2348 Leptis Ci, Morgan Hill2 beds, 2 full, 1 part baths
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$888,000 : 16935 Oak Leaf Dr, Morgan Hill4 beds, 2 full, 1 part baths
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Showing properties
1 - 3 of 500+.
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(all data current as of
6/19/2013)
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$450,888 : 542 Manzana Pl, San Jose1 bed, 2 full baths
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$319,000 : 605 N 15th St, San Jose2 beds, 1 full bath
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$875,000 : 2598 Clarebank Wy, San Jose5 beds, 3 full baths
Listing information deemed reliable but not guaranteed. Read full disclaimer.
