5 Tips For Making an Offer on a Property For Sale
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By :
Lawrence J.
Submitted
2010-03-13 08:17:28 |
When buyers look at homes for sale, they are often under the impression their real estate agents will suggest a reasonable price. Most realtors will avoid doing so, which can understandably frustrate their clients. Agents want to avoid encouraging a low offer that results in their client missing an opportunity. Similarly, they want to avoid recommending an offer that turns out to be too high.
In the end, you ll need to absorb the information your realtor provides (i.e. market data, details about the neighborhood, etc.) and use it to formulate an acceptable offer. Doing so can be difficult. Here are five suggestions that will make the process less confusing.
Tip 1 Identify The Seller s Purchase Price
The prices attracted by other homes for sale in the area will definitely influence how receptive a seller is to your offer. But that doesn t mean you should ignore a potent bargaining tool.
Often, property owners are willing to accept a lower price in order to accelerate the sale. If you can identify how much the homeowner originally paid for the property, you ll be in a better position to extend an attractive offer. As a side note, if there are several buyers interested in the house, this will be less effective.
Tip 2 Find Out Whether Nearby Properties Sold For List
Your realtor should be able to provide a report that reveals whether homes for sale in the area sold for the prices at which they were listed. You ll want to examine this data for the past several months in order to determine market trends.
This can be an important negotiation tool. Suppose you notice that nearby properties that have the same floorplan and design have consistently sold for 3 percent less than the listed price. You can use this information to encourage the seller to accept a more reasonable offer one that is 3 percent less than their starting price.
Tip 3 Determining The Seller s Level Of Desperation
This tip may sound mercenary, but it is pragmatic and can be useful for moving a sale forward. Even in a soft real estate market, many sellers are hoping to attract prices that allow them to sell for a sizeable profit. However, if the owner of a property is maintaining a large mortgage, that person will usually be more receptive to lower offers. This is especially true if a given property is vacant. In such cases, the owner is often paying the mortgage payments while simultaneously paying on a second home.
Tip 4 Compare Price Per Square Foot
A home s price per square foot can be a useful bargaining tool in certain circumstances. The key is to compare like properties. That is, comparing the square foot price on a small house to that of a much larger home is inappropriate. The price on the former will almost always be higher than the latter.
This metric is useful if the average price per square foot on similarly sized properties in the area has been trending downward. That information can help you negotiate a reasonable price with a seller.
Tip 5 Identify Market Demand
Market demand will play an important role in determining the price you re willing to offer. The more competition there is for a given property for sale, the higher your offer will need to be. In a buyer s market, competition is usually sparse (which often makes sellers more receptive). In a seller s market, competition can be fierce.
Coming up with the right price for a home can be an unnerving experience, especially if your realtor is unwilling to suggest a number. Use the tips above to do a little investigative work. You ll find that each piece of information can have a powerful effect on the negotiations, and ultimately, the price you pay.
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Author Resource:-
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