Hidden Risks If You’re Offering Asking Price in Los Altos
Timothy Alston | Broker
Aegis Luxury Real Estate · DRE# 01328224
Published
September 27, 2021
Timeless suburban elegance
If you’re a buyer in Los Altos right now, offering asking price may not be enough to secure the home you want. In this market, asking price is often the starting point of negotiation, not the ceiling. Homes regularly receive multiple offers within days of listing, and many sell above the listed price. Knowing this before you write your first offer could save you from repeated disappointment.
You know how you spend weeks searching listings, finally find a place that fits, and then lose it to another buyer you never even saw? And then you find out the winning offer was above asking? A lot of buyers in Los Altos are experiencing exactly that cycle right now. But here is the part most people have not stopped to think about yet: the rules of this market are genuinely different from what most buyers expect going in.
So before you start touring homes, it is worth asking yourself: what does your understanding of this market actually look like? Are you approaching this the way buyers did five or ten years ago, where you found a number you liked and negotiated down from there?
What Happens If You’re Still Thinking About Asking Price the Old Way?
In a normal market, buyers try to figure out how far below the asking price they can go and still land the home. From there, the buyer and seller typically negotiate toward a number somewhere in the middle. That approach made sense for a long time. Does it still make sense today?
According to the National Association of Realtors, homes are currently receiving an average of 3.8 offers and selling in roughly 17 days. Low inventory paired with strong buyer demand has pushed the market into auction-like territory in many areas, including Los Altos homes for sale. Selma Hepp, Deputy Chief Economist at CoreLogic, noted that the imbalance between buyer demand and available inventory has driven contract prices to record levels, with nearly 6 in 10 listed homes selling above the asking price.
Can you see how that changes the entire framing of what asking price actually means? If nearly 60 percent of homes are going above list, then offering asking price is no longer a strong position. It is closer to a starting point, and sometimes not even that.
If You’re Competing Against Multiple Offers, What Does Your Strategy Look Like?
Have you ever stopped to think about what it actually costs you to lose the right home? Not just emotionally, but in real terms: more months of rent paid out, rising prices that push your next target even higher, another round of inspections and negotiations. What is that actually costing you?
In Los Altos real estate, the highest offer does not always win outright, but a below-asking or at-asking offer in a multiple-offer situation rarely does. The asking price in today’s environment is often the floor, not the ceiling. If you have found a home you genuinely want, the question is not how low you can go. The question is how clearly you understand what it will actually take to get it.
What would it mean for you to walk away from the right home because your offer missed by a smaller margin than you expected?
The Appraisal Gap: A Risk Few Buyers See Coming
Here is something worth understanding before you make any offer. When contract prices climb above what an appraiser determines a home is worth, a gap opens up. Your lender will only loan based on the appraised value, not the contract price. The difference comes out of your pocket.
CoreLogic data shows that in January 2020, about 7 percent of purchase transactions had a contract price above the appraised value. By May 2021, that number had climbed to 19 percent. In competitive markets with low inventory and high demand, that gap is a real possibility, not a remote one. Buyers in Los Altos should factor this into their financial planning before making an offer, not after.
Do you know what your budget ceiling looks like if you had to cover an appraisal gap out of pocket? That is not a question to answer in the middle of a bidding situation. It is one to answer now, before you are in the room.
What Happens If Nothing Changes About How You’re Approaching This?
If you keep entering offers the way buyers did in a slower market, what does the next six months look like? More searches, more offers, more losses to buyers who understood the market better. Meanwhile, home values in Silicon Valley continue to hold strong, and every month of waiting is another month of building someone else’s equity instead of your own.
Based on what many buyers in Los Altos are experiencing, getting clear on your real budget, your offer strategy, and your appraisal gap tolerance before you write a single offer could be the single biggest factor in whether you get the home you want. That clarity does not come from searching listings. It comes from a straight conversation with someone who understands the local market in detail.
If that kind of conversation sounds useful, not a pitch, not a sales call, just a clear look at what this market actually requires of a buyer in your situation, Timothy Alston is available to walk through it with you. You can reach him directly at (408) 207-4593. The next step is yours to take whenever it makes sense for you.
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Broker · DRE# 01328224
Aegis Luxury Real Estate
Harvard Business School Online, Certified Master Negotiation
23+ Years Silicon Valley Real Estate Experience
Retired Military Veteran
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Aegis Luxury Real Estate · Timothy Alston, Broker, DRE# 01328224 · 10080 N. Wolfe Rd Ste SW3-200, Cupertino CA 95014 · (408) 207-4593
Last updated: July 10, 2026 | Data reflects July 2026 MLS statistics
