What Should My Offer Be?
February 10, 2009
"What should I offer?" is a question frequently asked by buyers who have found a home that they would like to purchase. It puts the real estate professional on the spot. If you read yesterday's blog that cited the sales data for January 2009, you have some idea of what is occurring price-wise in the various Inland Empire Markets. However, even with all that information, there is no formula for what an appropriate purchase offer for a particular property should be. The first response to the question of what to offer is generally "It depends".
So what are the factors that will influence the decision of what price to offer for a particular property?
First: How much do you want this property? If you have decided to make an offer, there should be something bout it that excites you on some level. i.e. picturing your self living there. (Of course, a really competitive listing price may be one influence, but I have found that buyers ultimately decide on a property because it satisfies one or more of their dreams about a home.)
Second: What other similar houses in that area have recently sold and what were the selling prices of those homes? Were they updated (new windows, new appliances, new paint, etc.)
Just as a real estate agent will do a market analysis for a potential seller to determine a listing price, so, too, should a buyer's agent give the buyer a market analysis.
Third: Perhaps this should be the first consideration: How much can you afford or how will the payments for this property fit into your budget?
Fourth: How actively has this property been shown? Are there other buyers interested in it? Your agent can check with the listing agent to see if there have been any previous offers. In this market with lower prices for homes and low interest rates, there is a large pool of buyers searching for a home. Strange as it may seem, this is a real estate market that has as many multiple offers on properties as did the heated market of 2004-2005. Thus, knowing the activity on a particular property can be useful in determining the answer to the question "What should I offer?"
Since many properties presently on the market are either Bank-owned or short sales, the seller's needs often play a role in determining what will be an acceptable offer. You as a buyer, need to also determine what will fit into your time frame, your budget and ultimately your life style.
"What should I offer?" is a question frequently asked by buyers who have found a home that they would like to purchase. It puts the real estate professional on the spot. If you read yesterday's blog that cited the sales data for January 2009, you have some idea of what is occurring price-wise in the various Inland Empire Markets. However, even with all that information, there is no formula for what an appropriate purchase offer for a particular property should be. The first response to the question of what to offer is generally "It depends".
So what are the factors that will influence the decision of what price to offer for a particular property?
First: How much do you want this property? If you have decided to make an offer, there should be something bout it that excites you on some level. i.e. picturing your self living there. (Of course, a really competitive listing price may be one influence, but I have found that buyers ultimately decide on a property because it satisfies one or more of their dreams about a home.)
Second: What other similar houses in that area have recently sold and what were the selling prices of those homes? Were they updated (new windows, new appliances, new paint, etc.)
Just as a real estate agent will do a market analysis for a potential seller to determine a listing price, so, too, should a buyer's agent give the buyer a market analysis.
Third: Perhaps this should be the first consideration: How much can you afford or how will the payments for this property fit into your budget?
Fourth: How actively has this property been shown? Are there other buyers interested in it? Your agent can check with the listing agent to see if there have been any previous offers. In this market with lower prices for homes and low interest rates, there is a large pool of buyers searching for a home. Strange as it may seem, this is a real estate market that has as many multiple offers on properties as did the heated market of 2004-2005. Thus, knowing the activity on a particular property can be useful in determining the answer to the question "What should I offer?"
Since many properties presently on the market are either Bank-owned or short sales, the seller's needs often play a role in determining what will be an acceptable offer. You as a buyer, need to also determine what will fit into your time frame, your budget and ultimately your life style.
posted by shirley harry at 8:35 AM
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