This is something that many first time home buyers face. They want to write an offer, but don’t know where to start. Of course, that is where your Realtor® should come in, but sometimes taking someone’s word just isn’t enough. Here are three basic ways to determine if you are paying too much:
- What are similar homes selling for? Considering that you may be getting a loan, the home has to appraise. And that is what appraisers do. They look at sales in the area, and make adjustments to the price based on size, condition, and bed and bathroom count. You and your Realtor® can do a similar process before writing the offer so you know what you are getting into. This is probably the best way to evaluate a property and base your offer on.
- How does this home compare to what is available on the market? Sometimes, if this property is a needle in a haystack and truly unique in a good way, it may be worth paying a little more, knowing that your options are limited.
- Are you seeing it as a pocket listing? A pocket listing is a home for sale that is not advertised on major websites. Assuming it is a Seller’s market (low inventory); sometimes it can be worth paying a little more to avoid any competition. I have had clients be one of five or even more offers. By buying off market, it increases your chance of buying without the competition and the bidding war.
Every situation is different, and hopefully you have the right Realtor® backing you up. I have had clients write over asking, and they still did well on their purchase.
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