When considering purchasing a home, you already know what the Seller is asking for the home, but how do you know what to offer? There are a number of factors that effect pricing and offers, beginning with the comparable sales.

Comparable sales are compiled from public record, or Tax Information, as well as recent sales within your area’s MLS, or Multiple Listing Service. You and your Agent will go over the most recent sales in the area for homes similar in square footage, number of bedroom and bathrooms, size of the lot, age of construction and others. You will then have a fairly accurate idea of what to offer.

Another factor in determining your offer price is the condition of the property. Structural item such as floors, ceilings, walls and foundation are important items to consider. Plumbing and electrical systems as well as roof and age of home will be factored in to your offer price. Note that this does not mean you don’t like the color of the carpet! If you choose to change cosmetic items, typically that will not be factored in to this equation. However, if the items are old, worn or obsolete, than you can consider that when formulating your offer.

The Marketplace will be a large factor in pricing your offer. In a “Seller’s Market” properties can sell within a few days of being listed. Sometimes for even above the asking price! In a “Buyer’s Market” properties may stay on the market longer and Sellers may be more flexible on their price and terms.
Seller motivation will be a significant factor. If a Seller has already purchased another home, the idea of making two mortgage payments may be daunting. A relocation or divorce may add to the Seller’s willingness to be flexible on the price and terms.

Sales comparables, condition of the property, improvements, marketplace and Seller motivation may all effect the pricing of a property, but only you can decide what you would like to offer. The initial offer may not be what you are willing to pay for the property or what you will agree to pay for the property at the final negotiations. Ultimately, you must start where you feel comfortable and end where you feel satisfied and excited!