Friday, August 15, 2008

What Should You Offer?

Buyers agonize over what to offer on a home. Before you make any offer you need to know what other homes have sold for in the same neighborhood. With our changing market it is important to have data for the last 90 days. If no homes have sold in the neighborhood in the last 90 days then go to the closest community with similar homes and look at their sales.

The recent sales data is the best starting point for making your offer. In our market, seller's look at that data and tend to stick to it. This is especially true when dealing with bank owned properties or short sales.

Still, there are other factors that may affect whether you make an offer that is within the sales data range or not. Such as....

How are you paying?
Are you a cash buyer or do you need to finance? A cash offer is always stronger than a financed offer.

What costs are you asking for in your offer?
If you are asking for closings costs or any other costs to be paid by the seller remember that the seller will look at the amount you are asking for and deduct it from your offer price to determine his final number. For example: You make an offer of $200,000 and ask for $10,000 in closing costs. The seller will think, well the offer is really $190,000.

Does that mean you should not ask for closing costs? No. It is common to request closing costs and this should not jeopardize your chances.

When are you closing?
Sellers prefer a fast close. That is why cash buyers are so attractive because they can generally close within 7 days. Compare this to a typical closing date which is 30 - 45 days from an accepted agreement.

What is the condition of the home?
Fixxer uppers generally sell for less because of needed repairs.

How long has the home been on the market?
Your real estate agent can tell you how long a home has been on the market. A seller sitting with a home on the market for a few months may be motivated to look at your less than market value offer. However, make sure that you know why that home has sat on the market for so long. If it started out priced high then that could explain why it sat for so long. In that case, the seller may decide to wait to get the offer they want.

What type of buyer are you?

I think this is the most important factor. If you love the home and can't imagine life without it then your offer should reflect your love. In our market multiple offers are common and you don't want to lose your dream home to others. If you are the "I don't fall in love with real estate" type then your offer will be completely different.

Regardless of the above, you determine the offer price and terms. Offer what you feel comfortable offering on a home (based upon all the available data) and then let the seller decide what to do.

Next week I will discuss the offer process.

Related posts:
Making an Offer on a Las Vegas Home

Las Vegas Bank Owned Properties

Solve your Real Estate Worries with Four Questions

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