First-Time Homebuyers: Avoid a Bidding War
Rather than risk losing the Capitol Hill two-bedroom, first-time homebuyer Wade Kirshy made a generous offer, $7,000 above the asking price. But less than 24 hours later, the 28-year-old Washington, D.C., attorney received surprising news: His offer was only one of 11 - and the sellers chose another bid.
In another sign of a housing market recovery, bidding wars are back. Not everywhere, but in some upper-middle class suburbs around San Francisco and New York, and other areas where prices have hit bottom, first-time buyers eager to take advantage of relatively low prices and low mortgage rates are actually driving up prices, says Tara-Nicholle Nelson, an analyst at Trulia.com. Buyers are competing at the low end of the market, too, for homes under $200,000 and foreclosures, as buyers with smaller budgets take a stab at ownership. And for sellers, that might mean their long-awaited day has finally come.
In fact, in many areas, homes are selling at pre-crash prices. During the bust, in Chicago's Loop and Berkeley, Calif., houses were selling for as little as 4% below the asking price - now they're back to 5% above, according to ZipRealty. Similarly, in distressed cities like North Las Vegas, Fort Lauderdale, Oakland, Calif., and Chicago's Greater Grand Crossing, homes are selling at up to 9% above their asking price, as buyers clamor over foreclosures and short sales, says a ZipRealty spokesman. Of course, even after a bidding war, many of these houses are still bargains - 9% over an asking price that's 50% off its peak value is still a deal.
Read the full story at SmartMoney.
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- First-Time Homebuyer's Guide
- How to Shop for Your First Home
- How to Price a Home to Sell Fast
- How to Get a Low Mortgage Rate
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