Short post as a number of our clients have gone into the offer process without truly grasping how competitive target properties are. High rates, low rates, economic slowdown or a raging bull market, no matter the climate, a property that checks many boxes, listged within reasonable price range and situated in a good school district will always draw multiples, oftentimes pushing the contract price significantly over asking price.
Unfortunately, many well intentioned Buyers are finding themselves immediately priced out of their target area even as forced sellers are putting their "first time on the market in 50+ years, original condition homes" up for sale despite the higher rates. And yes, many listing agents will price extremely low to guarantee multiple offers eliciting shock and awe from newer Buyers when the accepted offer is $200k over asking.
What can you do as a Buyer? 1) Temper expectations and 2) Focus on things that you can or can't change
We see too many prospective Buyers worrying about carpeting or countertops rather than location, wants vs needs and ultimately budget. Turnkey comes at a premium and chances are your tastes aren't completely in line with the previous seller/flipper/developer, etc.
Lastly, the most important tip is to structure offer spectrum as best as you can. Sure you can get a deal on a property that's been on the market for 365+ days, it may not necessarily be a deal even if a favorable $/sf etc. Your goal is to get your target property under contract and if that means going over the the top a bit (but still safely within your comfort level), it may be worth it. Nobody wants to overpay, but if you're outbid and continuing your search, chances are the floor has risen and you'll find yourself both overextending AND priced out, a place no Buyer wants to be.
Buying a property is always stressful, but hopefully it becomes less so over time as you further filter your criteria.
Hang in there all!
