Elise Greenberg

Your Neighborhood Realtor

How Much Should I Offer on a Home?



How much should your offer be on a home you wish to buy?

 

Consider three sets of facts/information:

Market facts:

  • Price of similar sold/pending properties in the last six months (possibly more) within a 2 mile radius, same school district
  • Current percentage of list price to sold price (however, if the property is priced "right", this won't apply)
  • Supply and demand (market absorption rate)-what is the current month's supply of available properties; if under 5 months, expect to pay more in a competitive environment
  • Time on market-compare the property marketing time with other available properties active, pending and sold

Property facts:

  • Property condition-the more updated the condition, the higher the sales price as most buyers do not want to have to renovate/redo/remove wallpaper, paint, etc.
  • Length of time on the market- find out the property marketing period for the home (not just the current marketing time); the longer the time on market, the more likely the seller will negotiate unless the seller is "stuck" on a price
  • Motivation-often the most difficult to discern, but try to find out the reason for selling; the higher the motivation, the more likely the home price will be negotiable
  • Property history-what mortgages/liens appear on the property tax records; when was it purchased; if more recent, it is unlikely the seller has much negotiating room

Personal facts:

  • Terms-the less contingencies your offer has (such as mortgage, house sale, etc), the more likely it will be accepted; the buyer's financial strength is very important to sellers
  • How soon do you need to move? If you don't get this house, what is the cost of waiting (rent, increased mortgage rates, etc.)