Making an offer: How to make an offer on a house

Making an offer: How to make an offer on a house

Once you’ve found a house you’re ready to purchase, the next step is making an offer to the seller. There are many factors to consider when deciding how much to offer.

When deciding how much to offer, you should:

• Determine the market — If you’re making an offer in a buyer’s market, you may be able to negotiate with a seller because there are fewer buyers.
• Find out how much the seller paid.
• Determine the seller’s mortgage balance — If the mortgage balance is high, the seller may be more motivated to sell.
• Look at comparable sales — Take a look at the sales price of properties in the area that are similar in age and size.
• Look at list price to sales price ratios — This will show you what homes were listed at and how much they eventually sold for in your area. This will give you an idea of what percentage below the asking price a seller may accept. Ask your real estate agent for this report.
• Check out the average square foot cost – See if the home is listed above or below the average cost per square foot.
• See how many days the home has been listed on the market or if it was relisted — If the home has been on the market longer than 30 days, the seller may be willing to negotiate.

Stephanie, a real estate agent, advises: “You want the offer to be clean, you want to ask for the important things. You don’t want to nit-pick on the offer. You don’t want to give the listing agent too many things to counter you back at if you’re going to be in a multiple offer situation or if it’s a very competitive situation. Whenever I write an offer, I give the agent—the listing agent—everything that they need, so they want to pick my offer. I will include verification of funds via bank statement from my client, verification of a credit report of my client, and a written preapproval letter”.

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VIDEO TRANSCRIPT:

AMY: When you’re thinking about what to offer on a house – you found the house, you love it, you want to buy it, how do we figure out what a good offer is? A lot of homework goes into that. I can help you determine what’s going on in the market, where that house is priced. Does it make sense for what the current market conditions are showing us and telling us? Is it priced too high or is it priced right? And then from there, making the best offer you can so the seller wants to work with you.

STEPHANIE: You want the offer to be clean, you want to ask for the important things. You don’t want to nit-pick on the offer. You don’t want to give the listing agent too many things to counter you back at if you’re going to be in a multiple offer situation or if it’s a very competitive situation. Whenever I write an offer, I give the agent – the listing agent – everything that they need, so they want to pick my offer. I will include verification of funds via bank statement from my client, verification of a credit report of my client, and a written pre-approval letter and I usually ask my client – or I help them – write a letter about themselves.

AMY: You don’t want to go in so low that the seller’s just not even going to communicate, and that will happen if you go too low.

MARIO: Don’t insult people with your offers. Your offers need to be realistic and they need to be somewhat beneficial for the seller. Because the moment you come in with a low-ball offer people lose respect for you.

KRYSTEL: They’re going to look at you and laugh.

MARIO: And it’s hard to gain respect of a seller back once you’ve thrown in an offer like that. They stop taking you seriously.

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Local Realtors

LocalRealtors.com is an international Real Estate Network helping consumers find a real estate expert that specializes in the community or property type they wish to buy or sell.

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