Making an Offer
In a Hot Market

Question: I'm trying to buy a home in a market where there is little inventory and sellers are pretty arrogant. I've found a neat little place with a view that's been on the market less than a week. My question is how much should I offer? Should I offer full price, or come in lower and hope to save a few bucks on the purchase? Remember, the market here is super hot.

Dear Marc: Your offer should be based on what you are willing to risk. If you are confident you can find another home you'll like in a reasonable amount of time, then by all means, come in low. If the sellers don't accept, don't counter your offer. If another buyer sneaks in at a higher price, at least you'll feel satisfied that you tried to get a bargain. Keep trying and you'll eventually succeed.

On the other hand, if you feel that this is the only house for you (you're hopelessly in love with it), then do what it takes to get it. In a very hot market, that means offering full price (or very close to it). Today, most parts of the country have a strong seller's market and many buyers are in your predicament. Your choices are to jump in and fight the crowd for the few, expensive homes available, or simply bow out and wait for the market to cool down, as it eventually will. Remember, just three or four years ago in most parts of the country, homes had fallen 30% from previous highs. No market always goes up.

Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Buy Your First Home," (Dearborn, 2000).

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Marc, Sacramento, Calif.

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