Throughout your home-buying journey, there's nothing more exhilarating than finding the home of your dreams. You can’t wait to try new tasty recipes in that spacious kitchen or relax in your cozy nook with a book in hand. Once you think you’ve found The One and the daydreaming is over, the next thrilling part is making an offer.
It's tempting to rush into writing an offer and seal the deal before another buyer gets their hand on it. But not so fast. Before making an offer on a home, you need to do your research to ensure that you get the best deal possible and avoid potential headaches down the road.
Here are some guide questions to help you make an educated and appropriate offer that the seller will gladly accept.
Before making any real estate purchase offer, you must determine your current local market conditions. Traditionally, in a buyer's market where available inventory is high and houses tend to sit on the market for longer, you can have more flexibility on price.
Home sellers might be more willing to negotiate with you since offers are usually fewer. You might be able to submit an offer that’s below the asking price and have the upper hand in negotiations.
In a seller’s market, however, it’s typically much harder to go below the asking price because inventory is low and multiple buyers are interested in the same properties. Since sellers usually get multiple offers, you might find it difficult to negotiate.
If you want the property, it’s best to offer the list price or even go above the asking price if you can. Knowing the current inventory in your area is an absolute help when deciding how much to offer.
Once you've determined how much wiggle room there is to work with, it’s time to research recent sales in your desired neighborhood.
With the help of your local real estate agent, ask them to work up a comparative market analysis, commonly known as comps, which will show recent sales prices for similar homes that have sold in the past few months.
This information is the key to knowing whether the seller’s asking price is fair and reasonable or if they’re asking too much or too little for their home. You can use it as a reasonable baseline in terms of a starting offer.
If a property’s listing price is already noticeably higher than comparable homes, don’t be afraid to submit a low offer. Your agent is your best partner when it comes to breaking down recent sales and justification for your offer, giving more room for a productive negotiation.
If the house has been available on the market for a long time, also considered a stale listing, the seller is probably extra motivated, which can mean flexibility on price.
On the other hand, if the property has only been up for a few days, it might be best to match the asking price and be prepared for a bidding war if the home draws a lot of interest.
Information on how long a house has been on the market can easily be found on most real estate listings. If not, your trusted real estate agent will have access to this information through the multiple listing service.
Before making an offer, take the time to know the condition of the property, as it directly impacts its market value. Is it in need of repair or is it move-in ready?
A house that requires significant repair or renovation will have a lower price than one that is move-in ready. This is why you'd want to have a thorough inspection of the property.
If you’ve found a fixer-upper that’s attracted little to no buyer interest, you might feel confident making a lower offer. Keep in mind the cost of replacing major systems such as the roof, furnace, windows, and HVAC units when determining your offer.
Homeownership is a huge financial commitment. You’ll need to make an offer you can afford by understanding your budget, your pre-approval amount, down payment savings, closing costs, and additional expenses.
Your mortgage pre-approval from your lender will give you a realistic price range so you won’t make an offer that leads to financial strain.
Maybe you’ve been house-hunting for a while and finally found the perfect home. If it meets your needs and fits your budget, it may be worth offering the asking price or even slightly more to show you’re a serious buyer.
Don't Know How Much To Offer On A Home? Consult With A Knowledgeable Real Estate Agent
Crafting an offer isn't just about how much you can afford to pay, but also about how to be competitive and get the best deal possible. If you want to employ a strategic approach to secure your dream home, leverage the extensive experience of your trusted local real estate agent.
Aside from guiding you through the offer process, they can discuss your options and recommendations based on current market conditions, the home’s conditions and features, and comparable sales, all while considering your preferences and budget. You can easily take the guesswork out of the process and negotiate successfully when you find a knowledgeable and dependable agent.
