It makes little difference whether
you are a veteran home buyer or a first-timer. When it comes time to
make an offer on a home, how do you know that what you are offering
is a fair price? And how do you know when the seller is asking too much?
At Amanda Howard Real Estate we understand the frustration associated
with determining the right amount for your offer. There are many things
to consider, and there really is no standard value calculation. Consider
that two identical homes on identical pieces of land, located on either
end of a single city will vary significantly in value. So how do you
know what the true value of a home is? And how do you know how much
to offer? There is a delicate balance between offering too much, and
offering to little and insulting the seller. Here are some of the ways
that we estimate the approximate value of a home. Hopefully, they can
help you to craft an excellent offer!
Ask Your Buyer Specialist for
a List of Recent Sales in the Area
You may not realize just how much listing prices can vary from actual
selling prices. Your buyer specialist can provide you with a detailed
report of homes that have recently sold in the area where you plan to
buy. The information contained in the report will include the listing
price and selling price of each home. This information is valuable to
you because you can use it to determine the average difference between
the listing price and selling price. In some markets, buyers pay less
than the seller’s listing price. In other markets, the buyers
pay significantly more than the listing price. Really, it depends on
the local market trends. By studying our report, you will be better
equipped to judge the market conditions.
Hire an Independent Appraiser
Depending on the anticipated price; you may opt to have an independent
home appraisal completed before you make an offer to the seller. The
general rule of thumb to follow when selecting an appraiser is that
he or she should not be connected with either you or the seller. This
makes the appraiser a completely independent third party and implied
a more objective appraisal. When you complete a home appraisal before
making an offer, your lender probably will not use the same appraisal,
and you will need to get a second one. However, here’s an overview
of what you can expect from an appraiser. The report that you receive
will contain information about the property and the surrounding area.
You will receive a list of three comparable properties in the area and
a statement about the housing market at the time of the appraisal. The
appraisal report will give detailed information about items that are
dangerous, or those that seriously impact the appraised value of the
home. If there are any serious problems or damage, it will be noted
on the report as well. The piece of information that you are the most
curious about, the appraised value will be included in the report. Unless
you plan to purchase a very high-value home, you probably won’t
need to hire an independent appraiser prior to making an offer. But
know that you do have this right as a buyer.
Know Your Representation
Knowing your representation well is wise for anyone involved in a real-estate
transaction. If you are working with a seller’s agent, you will
get little assistance from the agent, because the agent is working to
get the best possible price for the seller. However, if your agent is
a buyer’s specialist, he or she is looking out for your interests
and can be quite helpful in the process of crafting an offer to present
to the seller.
Learn as Much as Possible About
the Seller
The more information you have about the seller, the better your chances
of making an offer that is accepted the first time. Ask your buyer specialist
how long the home has been on the market. Do you’re best to determine
through your home visit the reason for the move. Look for subtle clues
indicating a change of employment or even a pending divorce.
Determine Whether the Home Is
Overpriced
As mentioned earlier, real estate markets vary by location. In some
locations, sellers choose to list their home for a price that is higher
than what they anticipate receiving. Since you obviously cannot ask
the seller what his or her bottom line is, you will need to figure out
the local trends before establishing an offer price. If you find that
a home is overpriced, you need to be careful to make an offer price
that will make the seller feel that you are a seriously interested buyer.
Determine Whether the Home is
Under-Priced
If you determine that the listing price is less than what comparable
homes have sold for, then you know that the seller expects you to offer
a price that is higher than what he or she is asking. Consider starting
with the average sale price of comparable homes in the area, or find
another way to determine your offer amount. Keep in mind that when a
home is listed below its market price, an offer equal to the listing
price may seem insulting to some buyers. You need to find a balance
between the listing price and your offer price that will satisfy your
needs and those of the seller.
Trust Your Instincts
If you have found the perfect home for your situation and you are willing
to pay a premium in order to purchase the home, then feel comfortable
offering a high price in order to increase your chances of having your
offer accepted. If negotiations reach a stalemate and the seller does
not seem interested in your offer, then you might need to move on. Every
buyer and every situation is different, so the best thing you can do
is to become educated. An educated consumer is every realtor’s
favorite client! If you take the time required to research the home
and area into which you want to move, you will be far better off in
the end than someone who has simply not put in the time required to
make wise decisions about the offers they make to sellers.
