The frenzied market in real estate has prospective home buyers ready to gamble, according to a study.
Two-thirds of would-be homeowners would resort to “aggressive tactics” -- such as paying the seller’s closing costs, bidding above the asking price or borrowing money from loved ones for a down payment -- to get the home of their dreams, according to the survey by real estate website Trulia.
“Consumers are worried that mortgage rates and prices will keep rising before they buy, and many are willing to fight over the limited number of homes for sale,” Jed Kolko, Trulia's chief economist, said in a statement.
According to the survey, 25% of respondents would bid 1% to 5% over a home’s asking price, and the same percentage would offer to cover the seller’s closing costs.
Trulia said young adults -- ages 18 to 34 -- are more willing to resort to tactics the firm labels aggressive, with 30% of those respondents willing to pay the seller’s closing costs and 31% willing to bid 1% to 5% over asking price.
Home prices in major U.S. cities rose 12.1% in April from a year earlier, according to Standard & Poor's/Case-Shiller index of 20 large U.S. cities. Since the beginning of May, the average rate for a 30-year fixed mortgage has risen roughly one percentage point.