Real Estate Blog

How Much Should I Offer?

This is a question that nearly every one of my clients who are buying a home asks me; and it’s a good one. As the professional from whom they seek advice and guidance, this is a question that I answer with knowledge and forethought. The answer isn’t a one-size-fits-all. It is based on several factors, the biggest of which is “what is the home worth.” That’s the real question, isn’t it? What is the home’s market value?

Market Value is generally defined as the price that someone is willing to pay for a certain item (in this case, a home). In order to determine what I feel my client should offer for a home, I look at the following:

• What are similar homes selling for NOW, or at least within the recent past.
• Does this home have any outstanding features that set it apart from the other homes that have sold or are listed? Upgrades, a pool, extra large lot, etc.
• Does this home need significant repair?
• How long has the home been listed for?
• How many homes are currently available in this neighborhood (that are comparable)? More inventory, lower value, generally speaking.
• How quickly are homes currently selling in the area?

Do you notice that I did NOT list “is this home lender owned, short sale, or individual sale.” In my opinion, that is more or less irrelevant. The selling party shouldn’t affect what the home is actually worth.

Some people say that you should offer no more than 80% (or %85, or %90), but that’s too simple. The percentage of asking price will be dependent on how close to market value the home is listed. If it’s listed under market value, then even offering full asking price may not be enough. On the other hand, if it is listed much higher than its worth, then even a “good” offer may not be enough if the seller isn’t reasonable about his/her home’s true value. In the end, the home must appraise for at least what you’re paying, or else the bank will not approve the loan.

So, in the end, how much you offer will depend on many factors, which you and your Realtor can discuss once you find the home that you love. If you would like to find a home in Peoria, AZ or anywhere in the general Northwest Valley, please call or email me today. I promise to be there not only to show you homes, but to guide you every step of the way! Have a great day! Visit me at http://www.azhouseagent.com