Making An Offer To Purchase A Home

By Author: Nigel A.
Total Articles: 273
Comment this article

Many of home owners leave all the technicalities to the real estate agent but you can utilize his expertise to figure out a right price when offering a price for a home. There are a couple of steps that you should follow in order to find out the right price for a home:

1. Obtaining essential data before making an offer - it might come in hand to find out why the home owner is selling the house but finding this out might be a difficult thing to do because the real estate agent might refuse to tell you this aspect. However, you can obtain this information without relying on the cooperation of the real estate agent. You should realize that none alone of the following is enough, but each of them used in conjunction with the others will help buyers to make the decision on which price is best to offer.

2. Determine the market - if you plan on making an offer in a buyer's market, you will have less competition for the home. In such a market, a home seller is very receptive regarding any offers; this would be the ideal market for a person that wants to purchase a home. On the contrary, if you are buying in a seller's market, ...
... there is a high probability that the sellers won't accept a lower price. As a matter of fact, not only that the price won't be lower than the one listed but it could actually go up.

3. Find out how much the seller paid - although the price paid by the seller won't be very different from the actual price of the home, if he purchased the home in a depressed market, the price of the home today might be a little bit higher today. Although you won't be able to find out the condition of the home when the seller bought it, you can adjust the value taking into consideration appreciation and remodeling improvements.

4. Examine comparable sales - when you are looking at comparable sales it is advisable to look only at the homes that have a similar configuration, location and age to the home you plan on purchasing. You should use the data from the most recent sold sales (within 6 months).

5. Determine the seller's mortgage balance - unless the seller of the home is in default and he is willing to participate in a short sale, the seller is highly unlikely to accept an offer for less than the mortgage plus the closing costs.

6. Check square-foot cost averages - you should know that the smaller homes are actually priced higher per square foot and on the contrary, the larger homes are priced lower per square foot. It is important to know that you can't just simply take the average square-foot cost and multiple it by the square footage of the home you want to buy in order to come up with a reasonable price to offer. However you can check the trends in order to determine if the square-foot cost averages are on the rise/declining and use the information to your advantage.

All things considered, in order to make an offer there are a couple of things that you should take into consideration. Gather as much information as you can and you will have the possibility to make a fair offer.

About Author: Nigel A. is the owner of www.javeapropertyfinder.com, a website that offers Javea property management services.