Making The Best Offer – Saving Yourself Money On A Property
Neil Picart, P.A, Realtor® …..
The process is almost complete, or so you think. Unfortunately the hardest part is making the best offer. This is where you set aside your love for the property and view it strictly as a commodity again. Does it blend in with the neighborhood? Is it older or newer than most homes in the neighborhood? Is it of average size for the neighborhood? What is the sold price/square foot ($/SqFt) over the last 3 months in the area. What is the percentage rise in value for similar homes over the last 3 months? Three months is a good reference for evaluating a property because most lenders will only go back that far in assessing value to a property. All these are important questions to ask as you decide on what to offer.
If you are part of the fortunate 1% of buyers the first offer you make on a house you like will be accepted. If you are like everyone else you will make multiple offers on more than one property before buying your new home.
Remember your pre-approval is your guide. It is always a good idea to ask your lender for an estimate of total monthly payment based on a certain dollar purchase. That will be a useful guide. For each property that you plan to make an offer on, have a maximum price that you are willing to pay. Your decision should be based on solid figures.
Don’t try to lowball a well priced property. If the owners took the time to research the market and price the property accordingly, don’t think that you will have a shot by offering them $10,000 or more below the asking price because that is what you think it is worth, or that is all you can afford. Remember to look within the framework of your pre-approval and make reasonable offers. Similarly if the owners priced their home way above the other homes in the neighborhood, don’t waste your time making an offer. Even if they accept your offer, your lender will not approve the final loan if the market cannot justify the price. Real estate is always about location and price.