How much should you offer on a home? Full asking price? A little more or less? This will depend on the type of market you are in, and other important factors. So let’s talk about this important next step to buying a home.
1. When you make an offer on a house, you need to consider the type of market you’re in. Is it a seller’s market? If so, you should offer the full asking price or close to it (if it’s a reasonable asking price). You should also move quickly to avoid losing the home to another buyer. If it’s a buyer’s market, you’ll have more bargaining power and more time.
2. Have your real estate agent show you recent and comparable sales in the area. These are known as “comps,” and they will help you prepare a realistic offer based on hard data — and not based on the seller’s wishful thinking.
3. When you make an offer on a home, you will have one of three outcomes: (1) The seller will accept your offer. (2) The seller will reject your offer. (3) The seller will make a counter-offer to negotiate some aspect of your original offer. You need to be prepared for each of these. Discuss each option with your agent, and what you plan to do next.
4. Make sure your offer is contingent upon a successful home inspection and appraisal. This gives you a way out of the contract if the inspector finds a serious flaw you’re unwilling to accept, or if your lender appraises the home below the asking price. Your real estate agent should do this as a matter of course, but you need to make sure.