You’ve found your dream house, completing one of the major tasks of buying a home. But then comes the part that is not as fun — making an offer and then closing the deal. Especially with rising inflation, buyers are wondering how a recession relates to home prices. While a real estate agent is your best resource to help you determine the best price to offer, knowing the basics of how to come up with an ideal offer price can help you have a realistic picture of what to expect. Here are some strategies to keep in mind as you work with your agent to come up with an offer that is either below, over, or at the list price.
Be aware of market conditions and pricing
Before you start looking at homes, it’s wise to look at market conditions and have a general sense of how much the home you want to buy might cost you. Sellers’ strategies are also important here as some homes may be priced lower or higher than the list price on purpose. A lower price might be used to attract more buyers. Or, a higher price might be a way to ultimately get a higher offer. A real estate agent can help you spot these strategies and understand the true value of homes that you may be interested in buying.
Know what you want and what you can afford
Another consideration in the beginning of your home buying journey is your must-have list for your dream home and your realistic budget. With your budget defined, you’ll know if you can offer over the list price for a home. It may be difficult to realize that you can’t afford your dream home, and only looking at homes within a certain price range can help you when it comes time to make an offer.
When to go low
There are certain situations when agents will advise you to offer below the asking price. If you aren’t sure about the home, but would buy it for the right price, then low can be a solid strategy. If you think the home is overpriced intentionally due to market conditions, this another time to come in with a low offer. If a home is on the market for a month or longer, then a seller may be eager to find a buyer, meaning you can possibly get a better deal on buying a house.
When to go high
If you’ve found your dream home and you’d do anything to live in it, then offering a bit more can help you get ahead of your competition. Or, if you’re dealing with a competitive market, you may need to make a higher offer to buy a house.
When an offer can match what’s listed
If you and your agent have determined that the asking price is fair, and the house was recently listed, then it might be the moment to make an offer that’s on the mark with what’s listed. Remember —there’s always room to change the offer.
It can be difficult to know how much to offer for a home, but by having a general idea about the best scenario for different pricing situations, you’ll be better prepared to get your dream home.
