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How Much Should You Offer on a Real Estate Purchase?

By
Real Estate Agent with Tri-Lakes Realtors

How much should you offer when writing a contract to purchase a home?

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This is an area where it pays to listen a professional. Your Realtor can show you data on comparable properties that have recently sold and the price per square foot.

Also, a Realtor has access to statistics such as the sale to list price difference. This is the percentage that homes have sold for as compared to the asking price.

Many prospective buyers have convinced themselves that sellers are willing to accept 25%-30% off their asking price. In the majority of cases, this just isn't true, at least not in the Branson/Tri-Lakes area.

While it is a fact that some homes are overpriced, this is usually due to an owner's unwillingness to listen to the Realtor's price suggestion. It's more common to see overpriced homes sit on the market until the listing expires and then see the home back on the market at a more realistic price; than it is to see the sellers accept an extremely low offer.

To illustrate this point, listed below are the Average Sale to List Percentages from the Tri-Lakes Board of Realtors:

2005:  96.3%note

2006:  96.8%

2007:  96.3%

2008:  94.1%

2009:  94.5% (January and February)

These statistics show that, even though the number of sales are lower than they were three or four years ago, you probably won't make any progress offering less than 90% of asking price on your initial offer.

Remember that the seller's price is usually the result of a market analysis made by the Realtor, showing the owner prices of comparative homes that have sold. Also, unless the seller paid cash when purchasing the home or has since paid off their loan, the price has to be high enough to pay off the lender and as well as the fees incurred to sell the home.

With this being said, there are still some great deals to be had. You just have to realize that the price is probably already at or near its fair market value.