I just want to say that the agent that told their client to go that high over asking, with only a handful of offers, was looking out for only one thing: Their Commission
Let me explain how it works as an agent representing a buyer.
A buyer pays absolutely nothing to an agent for showing them 1 or 100 hundred places, for the gas, the parking, the time put in to book and find suitable places, the time spent researching the neighborhoods, to compile the offer, to negotiate the deal, to help along the whole process, etc… However they get paid once you purchase and close the deal. So if an agent has an opportunity to make some more money from a bidding war, is he or she really looking out for their client’s best interests or their own?
I have been in this situation quite often, and I always ask my clients, “next year at this time, do you think you’ll be able to sell this place for this price, not that you want to, but could you do it if anything were to disrupt your finances?”
The answer is usually NO.
Remember that what you paid over asking is not necessarily something that you will get back when you are selling, and you shouldn’t expect it.
Also, there is a land transfer tax that must be paid when purchasing a property, which is based on the purchase price of the property, and cannot be rolled into your mortgage; it has to be paid at closing, along with your lawyer’s fees.
So the next time you want to purchase a home, make sure you have a maximum amount set for what you’re willing to pay for any property, and if it goes above that in a multiple bidding war, then it wasn’t meant to be. You will get over it…
There’s always another house, you are the one that makes it a HOME.
