With the real estate market being so competitive, it's more important than ever to make your offer a good one. Some areas of the country are so low in home inventory that offers $100,000 over the listing price are not uncommon. Things are a bit less competitive in many areas, but a good offer is still very important to the process. Find out how to make the right offer on your new place.
Don't Mess Around With Inappropriate Homes
Sellers will give more credence to offers that are backed up by a preapproval letter. Speak to a lender about the process of finding out how much you are likely to be approved for before you get started. That way, you will be focused on homes in the right price range. You should understand that a preapproval means your credit will be checked. While checking your credit in this manner (a hard inquiry) could lower your score a few points, it should not be enough to create problems with your eventual loan. Just keep the preapproval and the loan application within a few months of each other so they can be grouped. That will lessen the impact on your score.
Understand Comparative Market Analysis
Comps allow real estate agents, sellers, and even buyers to learn more about pricing. With a comp, one home is compared to other homes sold in the same general area in a recent amount of time. Size, number of rooms, lot size, features, and location are all part of the comparison model. That information gives the buyer inside information on what the home should cost. If the home has comps at $250,000 and the listing price is $275,000, you know the seller might accept an offer between the two price points. Be careful not to confuse comps with appraised value. That value is sometimes different because it doesn't take recent neighborhood sales into consideration.
The Final Authority
If you are uncertain about how much to offer, ask your residential real estate agent. They can offer you advice based on all of the factors combined. For example, they may know that the home is appraised at far less than the listing price. That means your financing won't cover the list price of the home without either a down payment or a price reduction. They may also know why the seller is selling, how many offers have been made and turned down, etc. Run your offer by a real estate agent, and find success with your home search.Share