For many buyers, especially, the first time buyers, the decision to write an offer is a critical moment, and usually the question is "well, how much do we offer"? From a buyer's perspective, there can seem like tons of factors to consider ranging from interest rates, supply & demand of the housing market, and the economy so it is not uncommon for a buyer to get confused and feeling like she needs a run a spreadsheet to determine the best offer!
To help with buyers, there are actually few simple steps to take that will help making the decision making process easy. (Writing a LOW offer does not always mean a good 'deal' because it may not get you the home you love!)
1. Comparables Analysis by a Real Estate Professional: first thing first, to determine the fair market value of a home, a comparable sales 
analysis is used. This means, the real estate professional will find home sales in the last 3 months, within a specific geographic area of the subject home that are similar in size, number of bedrooms, bathrooms, and other attributes. This is the same method that an appraiser uses to determine the value. It is a critical point to make, because if a buyer is obtaining financing to purchase, the home MUST appraise, otherwise, the price will need to be re-negotiated or financing may become an issue.
2. Affordability: to make an offer, a pre-approval letter by a reputable lender is required. Hopefully, by the time you found the home, your agent has helped you to go through the pre-approval process with a lender and understand the financing side of buying a home. Right before making an offer, it's wise to check with the lender again on interest rates and any other changes on the financing program you have elected. It's extremely important to make sure the offer price is within the budget. This includes the loan amount, down payment, closing costs, and repair costs if the home needs it.
3. Competition: this is where a skilled real estate agent comes into play, meaning, getting information that may help you write the strongest offer possible without overpaying. Typically, I start to pre-negotiate with the other agent when I arrange for showing & building rapport with the other agent. This way, by the time, we write an offer, I may have more information, such as seller's motivation to sell, how many offers are on the table, and what are the offers like, and most importantly, what is the perfect offer look like to the seller. Access to useful information helps clients to write the best possible offer to win in the competition.
On the final note, the question of 'how much to offer' ultimately comes down to how much do YOU, the buyer, like the home. Of course, buying a home with a good price is always important. However, getting the home you see LOVE is the ultimate goal. This is especially true in Santa Clara County, where most homes in decent location and condition are in multiple offer situation. Buying a home has always been a emotional decision, as it is the place people cherish as a safe place to be. To get to where you want to be, contact Chia today to receive a obligation free consultation.
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