Determining an Offer Price

by c21commonweath_ldowling 4. November 2019 12:44

You need to submit a competitive offer to successfully purchase a home, striking the right balance between impressing the seller and protecting your assets. While you want to get the most bang for your buck, you also want to put yourself in a position to seal the deal before another buyer offers something more lucrative. Here are several important things to consider before submitting your final offer to the seller.

The Market

First, determine if you are in a buyer’s or seller’s market. If you’re house hunting in a buyer’s market, in which a larger inventory of available homes drives down the competition, you have more negotiating power. When offers are few and far between, the seller is more likely to settle on a lower amount, and you probably won’t have to submit an offer above the asking price.

A seller’s market is different. Sellers are less willing to negotiate when they have several offers from other interested buyers. Extra competition prompts some buyers to waive the home inspection fee or submit an all-cash offer. If you’re buying in a seller’s market, expect to meet or exceed the seller’s asking price.

Pay attention to the general local market value to see what similar homes are going for in the area. A real estate agent can provide you with a comparative market report, helping you decide on a fair and appropriate offer. 

Timing

The longer the house has been on the market, the better your chances of successfully negotiating with the seller. If they’ve already moved into their new home and they’re paying two mortgages at once, they’re probably eager to sell—even below the asking price. Be prepared to offer more than that asking price if the home has just been listed in a seller’s market, however.

Desire

How badly you want this home compared to others in the neighborhood? If you’re set on this property, communicate your enthusiasm to the seller by offering more than the asking price. This lets them know you’re serious about the sale and possibly gives you an advantage over other buyers. Just don’t forget the additional expenses associated with home inspections, closing costs, and realtor fees.

Let an Agent Help

A local real estate agent can help you decide on an offer price that’s both reasonable and in line with your budget. If you’re unsure of how high an offer to submit, turn to an agent to provide you with important market information and a report of property prices in the area. You’ll gain a clear idea of how much money you need to compete against other buyers, forcing you to consider how much you love this particular home and how much you’re willing to spend.

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