There is a myth out there that every property sells over the asking price. People constantly ask me if it’s true. Clearly, that depends on what the asking price was. For a fun example, read about the ridiculously over-the-top mega-mansion called The One, which sold at auction for only $126M, which was less than half the $295M asking price: https://www.latimes.com/business/story/2022-03-03/the-one-megamansion-auction-sale
The point is that I see plenty of homes sell for asking or even less, and you should focus more on closed sale prices than asking prices for a sense of valuation. Sometimes sellers deliberately underprice to foster activity and something they innocently misjudge the market, but regardless, when the price is below the perceived value in the marketplace, the market will correct that error. Sometimes there’s no relationship between the number of bidders and the amount the price gets bid up. You can get intimidated when you see huge crowds at the open house, but that doesn't always translate into a much higher price. I’ve been in plenty of situations where just 2-3 bidders push the price up as high as if there had been 20. Mispricing happens both on the high and low end. And sometimes the stars align, the seller had the right price and you were willing to pay it, and they just take your offer and that's it. No competing. If the property is very special for some reason, like a uniquely wonderful location, view, or architectural style, more than one person will often want it, but the price at which they compete for it is not always above asking. I’ve seen plenty of listings with multiple offers that are all below the asking price if the asking price is perceived as too high.
When you’re trying to figure out how much to offer, look at closed sales in the area, and based on those prices, guess what others might offer for the place you’re interested in. Don't get caught up in thinking everything goes over asking, or how high you need to go over asking, just try to guess where the place will ultimately sell, and place your bid accordingly.
