Making An Informed Offer

Making an informed offerHow much you should offer for a home will depend on several factors, including the asking price, recent sale prices for comparable properties in the same neighborhood, how long the property has been on the market, the current market conditions and what you know about the seller and his/her motives for selling. You also need to factor in your own motivations and how much you want a particular property.
In a strong real estate market, buyers often engage in bidding wars for a property, sometimes even paying above the asking price. In that kind of market, you need to make your best offer, or close to it, right off the bat.

In a slower market, sellers become more likely to negotiate the price. Buyers can offer less than their best to start off with — how much less will depend on some other factors.
For example, owners who have to sell because they’re being transferred, in between jobs, getting married, divorced, expecting a baby, etc. are also more likely to be open to negotiation. So try to find out as much as you can about the seller, his/her reason for selling, how long the property has been on the market and whether its price has come down. If the owners are in no great hurry or have no need to sell immediately and are determined to get their price there may be no point offering them anything less than their asking price, provided of course you think it’s justified and you can afford it.

Finally, what are your own motivations? How badly do you want a particular home? How long have you been looking? How soon do you need to move? Have you lost other similar homes you really wanted to other buyers who bid higher than you? This is tricky because you need to guard against letting your fear of losing a particular home to another bidder to cause you to offer more for a property than you think it’s worth or you can reasonably afford.

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