The decision to purchase a home can be nerve-racking, especially if it’s your first time. This is for good reason. When small differences in houses amount to the cost of an SUV, the quality of your initial offer can cost or save you thousands. In determining how much to offer, it helps to consider these factors.
Factors in Deciding How Much to Offer for a House
- Your budget – The number one determinant of how much you should offer is how much you can afford. You should procure a loan prior to seriously considering buying a house, that way you know exactly how much you can offer.
- The seller’s price – No matter how good of a negotiator you are, the original starting point placed by the seller is going to largely determine how low of an offer you can make for a house. However, keep in mind that some sellers deliberately overprice a property to give themselves more room for negotiations. In these circumstances, be sure to put on your haggling shoes.
- Comparable house prices – How much are houses of the same size and in the same or equivalent neighborhood selling for recently? Related to this is the condition of the real estate market. House values can fluctuate significantly depending on whether the market is up or down.
- The seller’s position – Put yourself in the seller’s shoes. Consider how low of an offer you would be willing to take and what might prompt you to agree to a lower offer. Sometimes sellers need to close as fast as possible and are willing to accept lower offers if a buyer can close speedily.
Determining the fair market value of a home is a complex process. In doing so, it’s important to consider the value of the house itself, neighborhood itis in, and the condition of the real estate market. When buying a home, consider seeking the advice of a local real estate lawyer. He or she will help to speed up the process and ensure that your rights are protected.