The title says it all. Buyers are getting desperate in the market as any home that is priced near its market value is quickly inundated with offers often well above asking. Yet a home priced 5% over received market value sits for weeks without offers. This is a bit of an unusual situation as the bidding war often leads to a final price several points over ask anyhow. Buyers seeking to avoid the crazy auction style offer scenario should look at houses they "feel" are overpriced as these could be an opportunity to avoid giving up inspections and all of that in favor of a traditional negotiation with the seller. Maybe offer a little less than asking. Buyers should embrace homes that are priced a tad higher as they may end up with a better deal without the hassle of losing five or six deals being outbid before finally paying too much in a bidding war.
A good buyer's agent can guide buyers through the process of evaluating value and suggesting offers that have a good chance of success. Buyers should not be afraid of writing an under ask offer on a home that is overpriced. Writing such an offer on a property that is priced well is a fool's errand. Too many buyers are giving up vital protections such as the important inspection contingency to strengthen their offer against a half dozen others and if they simply look at a home that is a bit overpriced, they have a stronger negotiation position with the seller and will not have to give up important protections.
Buyers should embrace slightly overpriced listings as an opportunity to avoid the crazy auction style offer systems and remember that if a buyer is using a loan product the bank will not allow them to overpay for the house. The purpose of the appraisal in a transaction using a mortgage loan is in fact to protect the bank's position. It also in effect protects the buyer from overpaying for a property.
Buyers can navigate this challenging market under the good service and advice of a local expert agent.