How do I know what’s an appropriate offer for a home?
This is the most common question we get from buyers. If a home is on the market for $400,000, what do I offer? Or how much less than the asking price should I offer? Well, it all depends on how well the home is priced. If it just came on the market and it is well priced compared to other homes in the area then you may need to offer very close to the asking price or even the asking price in order to have a shot at getting it. If the home has been on the market for a long time at $400,000 and it is not selling, it is because it is not worth $400,000 so if you want to make an offer, then you could offer much less.
So there is really no straight answer other than it depends on a number of things, such as:
1. How long has it been on the market?
2. How long has it been on the market at its current price?
3. How does it compare to other similar homes in the area?
If you hire a good buyer’s agent, they will be able to answer all of these questions for you and properly advise you on what to offer. Remember a good buyer’s agent will conduct a detailed market analysis to determine what their opinion of the value is based on recent sales in the area and they will do everything they can to help you obtain a home for as little as possible. The best offer depends on a number of factors, not just the amount you’re willing to pay. You need to have a current pre-approval letter from a solid mortgage broker, an agent willing to go to bat for you in the event of a bidding war, and a buyer’s attorney to ensure you’re protected in the contractual process all the way to closing.