Now that you have found your dream house, you definitely don’t want to overpay. Well, who does? Before you submit the offer, you will want to figure out what’s the best deal for the property.
The spot where both the parties get what they want is where the best deals are made. To figure out how much your initial offer must be, you have to consider a few factors, analyze market conditions, comparable sales, and property conditions. Sound difficult? Not really. As long as the ducks are lined up, you will feel confident in your initial offer.
Here are 5 questions that you must ask yourself (or the realtor) as you determine the best price for your offer.
What is the market condition?
That’s right! Analyzing the market’s condition is a great place to start when considering what to offer on a home.
Check the temperature of the market place – is it hot, cold, or neutral? Is it a seller’s market or a buyer’s market? If you are buying a home in a buyer’s market, you will be facing less competition, and as a result, sellers will be more receptive to your offer.
If you are buying in a seller’s market, sellers will be more adamant about their offer. In fact, sellers will more likely receive multiple offers, which means you should put your best foot forward and make your offer as attractive as possible.
What have similar homes sold for?
Next, look at all the recent comparable sales.
When determining the sale price, analyzing comps is the most essential step. Consider the following criteria to generate comps:
- Construction Type
- Bedroom/ Bathroom Count
By focusing primarily on sold homes in your area, you can formulate a range of acceptable sale prices that your offer should fall within. Active listings display what the sellers think their Oakville apartments are worth, not what buyers are willing to pay.
How long has the home been listed?
The length of the time a home has been on the market is an important consideration to make when determining the offer price.
The longer the house has been on the market, the lower your offer can be. This means if you offer a low-price for a newly listed property, you risk the seller neglecting your bid for better opportunities. On the other hand, if you low-ball a home that has been sitting on the market for long, it is most likely that the seller will accept your offer or at least consider it.
Keep in mind that submitting an offer too far below the asking price can cost you the deal.
What’s the condition of the home?
This is a no-brainer. A property’s condition is a significant factor to consider when determining the offer price.
A property that is ready to move-in will receive a higher offer price than a home that needs a lot of repairs. While biding on fixer condos for sale in Burlington can save a huge amount of money, it is crucial to consider how much time and money are you willing to put into the property to make it livable.
When analyzing the condition of a property, you’ll want to check:
- Cracks in the foundation
- A saggy roof
- Rusty plumbing
- Uneven floors
- Water stains
- Signs of pest infestation
Some of these issues might be hard for you to identify; therefore, you should hire a home inspector to check the property for structural damages and potential issues.
How flexible are you on price?
If you are tight on a budget and don’t have the wiggle room to offer more money, you must try and play around with other aspects to make your offer compelling to the seller.
You can entice the seller by being flexible on:
- Closing schedule
- Rent backs
- Closing costs
The idea is to tempt and attract the seller when offering a lower price. For a seller who is in a rush to sell, waived contingencies and a shorter closing schedule could be more important than a higher asking price.
In the End
At the end of the day, the objective is to determine an offer that’s a win-win for both sides. Deciding the right price for your dream home can be confusing, but it doesn’t have to be difficult. Just keep in mind what’s important, remember to ask the right questions, and consider your alternatives.