Ever wonder how much you should offer on a home and what facts you should consider prior to deciding on a purchase price? There are many things to consider when it comes to buying a home and making an educated offer that will attract a seller to negotiate with you. Check out the list below.
- Condition of the home: Check the condition of the home prior to making an offer. Is it in excellent condition, poor condition or average condition?
- Fair market value: Is the home priced fairly to the market and more specifically, is the listed price in line with the other comparable and relevant homes in its community? Both recently sold homes and current homes for sale should be analyzed to get a solid picture of the current market. In a buyer’s market, the relevant sold properties, are what shapes the pricing. In a seller’s market, where prices are appreciating, the relevant listed properties will lead the pricing.
- Modern upgrades: Does the home feature the most up-to-date upgrades and materials? Are these upgrades consistent with the homes in the neighborhood? Does the home need major updating?
- Multiple offers: Is the property located in a hot location? Does the seller have several offers on the table?
All the above factors must be considered prior to determining what you’re going to offer on a home. With each answer, the offer price will come in higher or lower. When the home is average condition in an average real estate market, the general rule of thumb is to offer about 10% lower than the list price. However, the above factors may change that number, higher or lower. For example, if the property is located in a hot market with multiple offers on the table and is in impeccable condition with the most desired upgrades, the offer should be at list price or above. If the property is in poor condition in a neighborhood that isn’t desirable and it needs some rehab, the offer price should reflect that and may be offered at about 15-20% lower than the asking price.
Happy Home Shopping!
For all of your real estate home buyer and seller needs, be sure to check out other posts on our site. If you’re hiring a realtor, give us a call before you make any decisions.