Pricing houses can be confusing. There are many different terms and meanings for those terms, and it is sometimes hard to keep all the facts and figures straight. But all these terms serve a purpose, and that purpose is to get you the best price for your home.
As you know, many homeowners have one idea of the value of their home, and estate agents and buyers have their own ideas of the value of the home. The seller’s idea is often called the guide price.
It may not be an accurate valuation of a home, but it is a place to start. When it comes to buying and selling, you need a good place to start when setting the asking price.
This is one of those strange terms that, if you were not connected to the estate industry, you might not know what it means. This one is more common sense than anything else.
‘Offers Over’ simply means that the asking price is set at a level where the owners of the house expect the offers they receive to be over the asking price. In other words, the owners are making their asking price the minimum amount they will accept.
This is a simple concept, one you do not have to play a part. You can set what the home‘s value is to you and make your offer at that valuation. The owners just do not have to accept your offer.
The offers over price give buyers an idea of how much they should offer if they really want the property. Right now, it is a seller’s market, so you can expect to pay more than the asking price on most homes.
This is a term that is similar to the ‘offers over’ term. It is a price the seller is looking for when they accept an offer. It is more of a hoped-for price, not the real price or value of the home.
You may see the term guide price used for the more expensive and luxurious homes on the market right now. Other terms used in place of the guide price term are offers in the region of (OIRO) or offers in excess of (OIEO).
All three just give you an idea of how much your offer should be. There is no guarantee that your offer will be accepted or even the highest amount offered. You take your chances when the competitive seller's market is trending.
There are many potential buyers who may offer a lot more money than the guide price because they do not want any other home. The one you are bidding on is perfect for them.
This is going to depend on the selling situation. Some owners are not in a hurry to sell and set the guide price as a minimum it will take for them to agree to sell.
If you want the home, then you have to structure your offer in a way that the offer price is above the guide price and very attractive to the seller. In an auction situation, the guide price is the starting bid price.
You will be expected to bid a lot higher than the guide price if you want to win the house at the auction. Currently, in a non-auction situation, a respectable bid when a guide price is involved is 10 to 15% below the guide price.
In an auction situation, you cannot go below the guide price. Your selling situation will help you make the right bid for the property.
The definition of the guide price depends on the selling situation. In the non-auction setting, the guide price is the owner’s hoped-for selling amount. It is okay for you to bid lower than the guide price if a house valuation places the value lower than the guide price.
But you should not go lower than the previously stated 10 to 15% level. When making a bid in this selling situation, you should only bid what you can afford or what you think the house is actually worth. The guide price is just a starting point for potential buyers to set their offer price.
In the auction selling setting, the guide price is a fixed minimum. You cannot go lower than it, and you need to outbid all the others who are interested in owning the property.
Make sure your budget is high enough to accommodate surpassing competitive bids.
This is also a common sense term. The asking price is the amount of money the homeowner wants for their home. They will set the asking price after reviewing different home valuations to make sure their price is fair and reasonable to both them and potential buyers.
You are under no obligation to make an offer with the stated asking price. You can go lower if you feel the property has been overvalued, or you can go higher for different reasons.
One of those reasons is that it is a seller's market, and there are more potential buyers than you want. Sometimes the asking price is based on the owner’s sentimental value of the property.
In those cases, you need to make sure your offer is competitive but not over the asking price. This is what makes house buying a little complicated. You need to know the trends to make a good offer on a home.
When you are looking for a new home to buy, call our estate agency. We have over 10 years of experience placing bids of all types on different homes. Our agents keep track of the trends and can help you construct a competitive bid for those properties you are interested.
When you want a fair buying experience, come to our agents. When you hire the best, you get the best results.
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