You just
toured a house that caught your interest and you are considering
to make an offer. But how do you determine what a good offer
price is? When you prepare an offer to eventually purchase the
home you just toured, you already know the seller’s
asking price.
Finding your
offer price is normally a three-step process. It usually depends
on the market if you have time or the option to think about an
offer price different from the seller's asking price. Sometimes
you become involved in bidding war and you have to offer more
than what the asking price is. Or you just offer the asking price
and get the contract right away. But for when you want to offer
less than what the asking price is, the following applies.
First,
you (better: your real estate agent) look at recent sales of
similar house in that area to come up with a price range. Then,
you put into consideration additional data, such as the overall
condition of the home, improvements/enhancements made to the
property, the overall market conditions, and then eventually
you will look at the circumstances of the seller. This mix will
help you to settle on a price you think would be fair (and acceptable
for you) to pay for the home. The result from all these things
will be your offer price.
Do not necessarily trust your real estate
agent. Keep in mind his commission depends on the actual sales
price. The higher the price, the higher his commission will be.
Just keep this in mind if the recommendation he makes is not backed
up by real data. Overall you often depend on the information your
real estate agent has prepared for you. If you are in a buyers
market and houses go slowly you will probably have enough time
to do your own research. Don't feel pressured to buy a house. This
is not a small expense - this wants to be carefully considered
and evaluated.
