Over? Under? How to Think About Making an Offer
The decision to place an offer on a home is without a doubt one of the biggest ones you will make in your life. Taking this step means that you are able and willing to make a fairly sizable financial commitment, that you know where you want to live, that you’ve found a home worth your time, money, and energy. Once you’ve decided on the house, however, you still have one more question to answer: how much will you offer?
Lets begin breaking this down by recognizing that you’ve got three options: more than asking price, asking price, or less than asking price. Which of these three routes you choose to take depends on a number of factors.
The Current Market
Is it a beneficial time for buyers? For sellers? Knowing this will go a long way in helping you decide what sort of offer you are going to make. While the general real estate market throughout the country has a certain trend, it also makes a lot of sense to look at your own particular area to see what sorts of situation you’re facing when it comes to purchasing a home.
The Seller’s Motivation
An individual looking to sell a home because they’ve made expensive improvements and are looking to make a sizable profit is going to regard your offer far differently than an individual who is moving due to old age or relational changes. For some sellers, the only thing that matters is the amount of zeros at the end of your offer. Others will have additional factors that come into play such as expediency of closing, whether it is a cash offer or not, or whether they think a buyer is a good fit for the neighborhood. While sussing these factors out might be a little tricky, any information at all you can get into the reasons behind the home sale can help you determine just what your offer is going to look like.
Your Own Motivation
How much you are able to offer for a home is also going to depend on factors only known to you. If you find your dream home in your dream location, for instance, you might be willing to offer as much as you possibly can in order to make the dream come true, while a home of lesser desirability in a different location might still result in an offer, just not one that maxes out your finances. It is also helpful to know beforehand whether you plan on staying in an area for only a few years or if you are looking to buy the last home you’ll ever own.
Talk to Your Realtor
This is a final point that shouldn’t be forgotten. Your realtor can help you make the decisions on how much to offer based on all of the factors mentioned above, highlighting their value as a member of your team. Don’t hesitate to bring to them any questions and concerns you have about the offer process.