By Paul Siemering
We’re well into spring and Redmond’s housing market is as competitive as ever. Many buyers are jostling for popular homes, thanks to an 8.8 percent drop in inventory from last year. Redmond homes for sale receive an average of five offers, with some getting as many as 12 offers.
Buyers should prepare themselves: Redmond is shaping up to be even more competitive than it was last year. To maintain an advantage, I often tell my customers to be conservative with their budget. For example, if they can afford a $500,000 to $550,000 home, they should make an offer on homes priced between $450,000 and $500,000 with the expectation that a bidding war will drive up the price. Read More >>
In a bidding war, submitted offers will include something called a price escalation clause. The clause allows buyers to disclose a maximum price they would be willing to pay, including the increments they would go up to beat a competing offer. For example, on a home listed for $600,000, a buyer can submit an offer agreeing to escalate $5,000 for a maximum price of $650,000.
The listing agent must then show the winning buyer the competing offer that helped drive up the price. It’s a way to keep everyone honest.
Escalation clauses are fairly common in competitive housing markets. In March, 59 percent of offers made by Redfin clients in Redmond included a price escalation clause, compared with 46 percent of Redfin offers in all of King County.
Offering all cash on a home is another strategy often employed by Redmond buyers. But cash offers don’t always win. Sometimes buyers with strong financing and a slightly higher offer come out on top.
Redmond’s housing market is off to a strong start this spring. Home prices in the city remained relatively steady, dipping just 3 percent in March compared with the same time last year. The median home price is $464,000 and the median price for a single-family home is $699,000