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There is more to an offer than price, but it's the price that usually attracts the seller's attention. As a buyer, you want to pay the lowest price possible. Why pay more than you have to?
But, don't get carried away with trying to buy at a bargain price. Recently, a buyer in San Francisco made an offer in competition with three other buyers. His was the lowest of the four. He had been making low offers for months, always in competition and always with the same result -- one rejection after another.
It is possible to prepare effectively for making an offer, so that you don't find yourself making offer after offer with no success. The first step is to line up the financing you'll need to make a purchase. Most serious buyers are preapproved for a mortgage, some even before they start looking.
Once you know how much you can afford, you are able to compete in a multiple offer situation if necessary. Without preapproval, you have little chance of winning in a multiple offer competition. That is, unless you're willing to offer a higher price than you need to.
To make an offer with confidence, it's essential to understand local market conditions. It helps to look at a lot of listings in the area where you want to buy before you make an offer.
Visiting Sunday open houses is one way to learn more about the local market. Looking at listings on line also helps educate you about the local housing scene.
Ask your real estate agent to let you know about every new listing that comes on the market that might suit your housing needs. Arrange to see these listing, either with your agent by appointment, or at a Sunday open house.
HOUSE HUNTING TIP:
Keep track of the listings you see. Some buyers collect listing flyers in a folder or binder. Make sure your agent tells you the ultimate selling price when the listings sell, and make a record of this. Then when you find a listing you want to buy, you'll have valuable pricing information to help you decide what the property is worth.
In some situations, it won't be possible to see a lot of listings before you decide to make an offer. You might find the perfect house quickly. If so, ask your real estate agent to prepare a comparative market analysis (CMA).
A CMA will give you information about similar listings that sold recently, including how long they took to sell and how close the sale price was to the list price. You won't be able to look inside of the properties that sold, but you can drive by.
Have your agent take you to any other current listings that might be comparable to the one you're considering buying. This is good for comparison purposes, and it also ensures that there isn't another listing available that you might like better.
Before you decide what to offer, find out as much as possible about the seller's situation, how long the property has been on the market, and the strength of the current real estate market in your area.
In a hot seller's market, you may have to offer your best price without negotiating. When several buyers are competing for a listing, you may not have a second chance.
THE CLOSING:
But, if the market is soft, or if the listing has been on the market awhile, you may be able to offer a lower price and negotiate from there.
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