Tips on How To Make A Good Offer...

Real Estate Broker/Owner with Tower Realty

So what's the magic number? You want your offer to be good enough to attract the seller's attention, but not too high that you overpay for the property. So what to do? Hopefully some of these tips can help you.

Different markets require different strategies. In a buyers market you can often have the luxury of offering below the list price. You and the seller can then negotiate until you have reached a mutually acceptable price.

A seller's market, if your in a multiple offer competition with other buyers, you may not have the a chance to negotiate with the sellers. In this situation, your first price could the best offer.

Despite of the market conditions, it needs to be understood that the local market value needs to feel comfortable with your offer price. The best way to learn market value is to look at a lot of listings of the kind of home you hope to buy. These might be homes you see at Sunday open houses, or listings that you see with your real estate agent.

Let your agent know the addresses of any listing you see that might work for you. Ask the agent to let you know the sale prices when the transactions close. Keep a record of these listing and sale prices. You can always refer back to this data when you decide to make an offer.

House hunting tip: It's useful to look at the relationship between the list price and the selling price of listings you've seen. Let's just say if homes are selling, on average, for 97 percent of the list price, you might use this percentage as a gauge. If you think a property is well priced, you could offer 4-5 percent below the asking price and plan to negotiate a price that's approximately 3 percent below the list price. Your agent can provide you with additional comparable sales information for sold listings that you didn't see.

Some buyers and sellers don't like relative bids. A disadvantage to the seller is that it requires a counteroffer. A seller might not want to risk countering a lower offer when he already has a bona fide offer from another buyer for a higher price. A disadvantage for the buyer is that you reveal that you'll be willing to pay a higher price.

The closing: There's an element of guesswork involved in multiple offer bidding. It helps to work with a trustworthy agent who knows local market value and who can advise you how much to offer.

Comments (1)

Vincent McKamy
Samson Properties - Fredericksburg, VA
Realtor Fredericksburg Virginia

I think all buyers should make offers on what they think the house is worth - That is the true value of any house correct.  That is the value of anything that we buy.  The consumer sets the price. 

Good advice in any market - Thanks for the posting.

Dec 03, 2007 07:10 AM