Information you may need before making an offer
Just because you think you found the home of your dreams doesn't mean you need to jump right on and make an offer. In hot markets, not waiting too long is always ideal but now that the market has slowed slightly in the fall and winter months it's best to take just one or two steps back and get all the information before even making an offer.
Here is some crucial information to know before making that real estate offer.
Know why the seller is selling. You can often find this out from an open house or having your buyers agent ask the listing agent. The listing agent is not obligated to tell you this information but you may be able to determine why through a series of extenuating circumstances and other information. If it's a negative reason, such as traffic noise or unruly neighbors, this is not information that needs to be disclosed on the seller's disclosure form so you may never know these types of reasons.
Find out how much the seller paid for the property. As your buyers agent I can determine this by pulling up all the tax records and previous listing information. If the home recently sold within the last two years it can give you a good idea as to whether it's price correctly now. If it's been decades, the seller is most likely to receive a hefty profit from the sale and may take less on the purchase price.
Determine the seller's mortgage balance. Unless the seller is going through a short sale or foreclosure it's unlikely that they will accept an offer and less than their mortgage plus closing. If the seller has a high mortgage balance and the property is vacant buyers can assume that the seller is making his mortgage payments out-of-pocket, probably paying on two homes. If the mortgage balance is low, the seller might be motivated to immediately sell and can afford to wait out the market to get list price. [Source]
Determine square foot cost averages for your area. Although smaller homes are priced higher per square foot than larger homes you can take the average square foot cost and multiply it by the square footage of the home to come up with a reasonable price to offer. Check the trends to determine if the averages are on the rise or decline any to make an informed decision.
Determine how many days the home has been on the market. This is an easy answer that's usually within the listing agreement. Has the home gone through an expired listing? Has it been relisted within the last six months? Homes that have been on the market for months may have more motivated sellers and may be willing to accept far less than the asking price.
Analyze the list price versus the sales price in a particular community. Ask your buyers agent the differences between list prices and what the home actually sold for in a particular neighborhood over the last six months. This can give you a great snapshot as to what homes are really selling for.
It's best to have all your ducks in a row before making an offer. Now is the perfect time to take that extra step and learn as much as you can about the property so that your not paying more than you have to. For more information on real estate listings, making smart offers or anything related to the San Ramon real estate market call me today.
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