Make An Offer
Although your real estate agent is likely reluctant to name a price for you, you can utilize your agent's expertise to figure out a price to offer when buying a home.
Understand the Market
Before presenting your offer through your agent, you have to know whether the market is hot, cold or neutral. In a buyer's market, you will experience less competition with other buyers at the same time. On the other hand, you might not get much discount from the seller in a seller's market. In a seller's market, you might even have to pay more than what is asked for to win the bid.
How Much Did the Seller Pay for this house?
Finding out the previous sold price helps you better understand whether or not your offer seems reasonable. If the market has been quite steady over the past few years, your offer might be very close to the sold price.
If the property has been renovated since purchased, you simply adjust your offer to the increases due to appreciation and remodeling improvements.
Look at Comparable Sales
It is a crucial step to know the prices on comparable properties sold recently. Your agent should be able to generate a detailed report that helps you understand what a comparable property is worth. A good rule of thumb is never look beyond 6 months of time for an accurate assessment.
Analyze the Trend
A trend report will be able to give you a broad understanding of the market price. By comparing the listing price and the sold price on a property in the past 6 months, it would tell you the market trend. Are the homes selling above or below their asking prices? If so, then by how much? You can then adjust your offering price to the change.
Examine Square-foot cost
A house's price is determined by the environment it resides in. For example, the prices for two houses with similar features and size might be tens thousands apart, because one has a better view than the other. By using the square-foot cost wisely to your advantage to better determine your offering price.
Days on Market Gives Away
A listing which has been on market for too long usually ends up being taken off and resubmitted to refresh its market appearance. It is recommended to ask your agent to check its listing history. If the listing has been taken off and resubmitted recently, it means your might be able to close the deal with less what the seller asks for.
In conclusion, try not to become emotionally attached to the home before your offer to purchase is accepted. Prepare yourself for a counter offer. Keep several other homes in mind in case your offer is rejected.
*Please note that the comments contained on this page are for information purposes only and do not constitute legal advice.