First Things First – What Is The Home Worth?
The first step to making an offer is figuring out what the home you have your eye on is really worth. There are many places on line that will give you an estimate of a home’s value. The Zestimate that Zillow provides is one of the best known. However, the data they use may not be up to date or consider the actual condition of the property.
Recent Sales of Similar Homes In The Area Tell The Story
The best way to figure out if a home is priced competitively, is to look at sales of similar homes in the neighborhood, in similar condition, going back at least six to 12 months. This is where your Realtor’s experience and expertise is invaluable. Zestimates, are a good starting point but they cannot account for all the factors that determine value.
Successful Sellers Know Their Zestimates As Well As You Do
Most sellers today are as aware of their homes Zestimate as you are. They know that if they price their home too far above the estimated value without proper justification, that most buyers will simply move on. The price of ‘being greedy’ these days usually means no activity, or offers, at all.
We Still Have More Buyers Than Houses
It’s true that in today’s market we generally have more buyers than great houses priced to sell. This means there may be multiple buyers making offers on the most attractive properties at the same time. Knowing what a house is truly worth based on comparable sales gives you the information you need to make an informed decision about how much to offer.
Acknowledge The Seller’s Advantage and Create a Win/Win Negotiation
None of us want to overpay for a home and we all want the best deal possible. However, this is not a win/lose situation. A successful negotiation ends with both parties getting what they want, or at least need, out of the transaction.
If a home is priced right it may be prudent to make a full price offer, or an even higher offer. This is especially true if you need the seller to pay for some, or all, of your lender closing costs and pre-paid loan items.
Remember, if a house is priced at $200K and you ask the seller to pay $5000 of your closing costs for you, you really only offered $195K for the house. A better decision is to offer the seller $205k with them paying $5000 in closing costs. This way the seller gets what they want, and you get what you need.
Make Your Best Offer Up Front
There is an argument for making your best offer up front. With the help of your Realtor, start by determining what the house will likely sell for given the sales history in the neighborhood. Then, figure out what it is worth to you. Make your offer and be prepared to stick to your decision.
Acceptance, Rejected, or Countered
Once you make your offer one of three things are going to happen. Either your offer will be accepted, rejected, or countered. If countered, you may be informed that you are in a ‘multiple offer situation’ where the seller is trying to get the interested parties to bid against each other. If you have made your best offer, stand your ground and be prepared to move on to the next house. If your offer is accepted, then congratulations!
Become the Home Buying Jedi Master Your Are Meant to Be
When you find the home you want, don’t hesitate to make an offer. You’ve done your homework and are well-prepared to move forward. Click here and find out your Home Buying Jedi Master Mindset Score. I guarantee it will help you find home buying happiness. Take your time and fill in the comment sections too. You’ll be glad you did.
