I'm a first time home buyer looking for a house. I had my agent set up a showing for a home this weekend only to find that the price of the home has suddenly jumped $5000 today! What happened? Is this shady business or is there a logical explanation?

Shady business in the housing market? It’s a frequent thing these days.
That does sound fishy. Prices are all going down not up. I’d say drop your bid $6000 and let them know it’s a down market.

Not all prices are going down. People are buying to invest; people who haven’t owned a house in the last 3 years can now get an $8,000 handout from the government to boost them into the market. (This is a good policy to get people living in houses rather than just buying them up cheap and holding them for better times.)

It’s possible that the price of this house jumped because someone made a high bid on it. But unlikely. If that had happened, the seller would have jumped on it.

Move on. It’s still very much a buyer’s market. Good hunting!

@susanc That was my first thought, that someone had made a high bid. Maybe they did and then the loan didn’t go through. There are too many houses just waiting to be bought at a reasonable price.

I think thats called the old bait and switch.

Sounds like someone told them the house was listed too low, or a similar house sold in the neighborhood for more money. They can ask whatever they want as a selling price; it’s what a buyer is willing to offer that’s the real price of the house.

You should be able to ask your agent about this, or she/he should have given you an explanation. If you don’t have an agent you trust, find someone else. A good agent will show you a lot of houses, explain the pricing and answer every question you have, even in the middle of the night. My Father-In-Law made his fortune in real estate, and hubby started out in the business as well.

Make an offer $10.000 below the price for the house you want to buy, try to buy a house directly from the owner, try to avoid the real state agent, how do you do that, easy, go take your car and start cruising the neigborhoods you’d like to live in… the housing market will fall a little bit more in the next couple of months and will bounce back by early/mid summer, start looking and make offers, if the price suddenly jumps make the smart move, retire your offer and kick you real state agent… you have the money, you are the one with the power in this negotiation, if the agent tries to get more money from you, just say thank you and good bye, don’t rush… no matter what don’t rush….

@flamboi: those tactics will probably work, but it’s very unethical to cruise neighborhoods looking for listed houses and then contact owners directly; very unethical to kick out agents who have shown you houses.
Instead, cruise unlisted houses you like the looks of, walk up on the porch and make an offer directly to the owner. People are always interested in knowing what someone would offer them, and these days lots of people are dithering about whether to sell. Go get what you actually want, if you can.
And “don’t rush” is very good advice.