Making an offer on a home is often considered to be an art form because if you offer too low the seller may not take you seriously and too high and the house may not appraise. So making the perfect offer depends on the market you’re in and other factors you should weigh before making an offer.
Are You in a Buyer’s or Seller’s Market?
Your ability to present a lowe offer will depend greatly on current market conditions. So before you make an offer, determine what type of market you’re in. Traditionally, buyer’s markets come with a lot of flexibility on price, because available inventory is high and houses tend to sit on the market for longer. Sellers tend to be more willing to negotiate because offers are few and far between.
In a buyer’s market, most agents would not hesitate to submit an offer that’s around 10% below asking price. However, in a seller’s market, it is much harder to go below asking price at all, because inventory is low and multiple buyers tend to be interested in the same properties. So in this case going in with a lowball offer will not get you the home of your dreams.
How Long Has The Listing Been Active?
By paying attention to the property history, you can get a better idea of the demand for that house. If the house has only been on the market for two days, it is probably not a good idea to go in with a lowball offer. However, if the house has been on the market for a year with some price reductions, going in with a lower offer could help save you some money.
How Does The Price Compare to Similar Homes in the Area?
Once you have a general sense of how much wiggle room you have to work with, it’s time to look more specifically at recent sales in your desired neighborhood. Ask your S&D Real Estate Agent to work up a comparative market analysis, which will show you the list and sale prices for similar homes that have sold in the last few months.
How Badly Do You Want The Home?
Be sure to ask yourself how you would feel if your offer got rejected. If you think that you will regret missing out on the home, it may be worth it to consider offering exactly what they’re asking for or even a bit more. If you want a home badly enough, you need to make the seller an offer they can’t refuse. However, if you think you will be able to move onto the next property without issue, there’s no harm in trying to score a deal.
