You finally found it—the home of your dreams! Now what? It’s time to make an offer. Your buyer’s agent will guide you through the entire process, including sharing these nine factors to consider when determining an offer price on a home.
Making an offer
Before you can make an offer, there are several factors to consider when determining an offer price on a home. Are you ready to figure out where to start? Now is the time to ask your REALTOR® about the following.
The home’s current list price.
For starters, what is the home’s list price? Is the asking price in line with the fair market value? If so, is it within your overall budget?
The sold price of similar homes in your area.
Your buyer’s agent can provide you with valuable information, including what similar homes in your area recently sold for. Commonly referred to as “comps,” this information offers you a reasonable baseline in terms of a starting offer.
How long has the house been on the market?
In a nutshell, if the home has been available for longer than average, sellers may be more willing to negotiate or accept a lower offer.
On the other hand, if the property is new to the market, the offer may need to be higher.
Look at the condition of the home.
Before you make an offer, take the time to learn about the home’s history and pay attention to its details. When was the house built, what types of building materials were used, what is the square footage?
What are the home’s top features and amenities? Is it in need of repairs or is it move-in ready?
Consider seller concessions.
And the questions to ask yourself continue. Will you be asking the seller to make any last-minute improvements?
Or, would you want them to cover the closing costs? These are the sorts of questions to review with your agent.
Outline exactly what’s included with the home.
Make sure the agreement and offer clearly define what is included with the home, such as appliances or window treatments.
Add in the earnest money.
When you get ready to make your offer, remember to add in the earnest, or deposit, money.
Factor in home inspection contingencies.
It may be a good idea to consider the unknowns that could be uncovered during the home inspection. Leave room in your budget for any potential updates or repairs.
Is there flexibility in your offer?
Finally, when it comes to factors to consider when determining an offer price on a home, did you give yourself some wiggle room? Is your offer going to fall at the top, middle or low end of your budget?
If the price point is firm, can you sweeten your offer in other ways? Consider being flexible when it comes to requested repairs, the closing date or the closing costs, for instance.
Bottom line: even after doing your research and carefully considering several factors to determine your offer price, the sellers could turn it down. But, remember, your trusted local REALTOR® is on your side and ready to negotiate on your behalf!
Are you looking for additional real estate tips? Keep reading our blogs for more!