Buyers often ask, “How much should I offer for that home”. This is a big important question that most home Buyers commonly ask their agent. The dependence Buyers put on the real estate agent’s answer and the weight they give it in their decision is what I want to discuss. There are 4 points to consider;
- Let’s say that you qualify for a payment greater than you really want to take on. This is usually the case. Today, every $1000.00 you increase your offer is less than five dollars a month. So, an increase of $10,000 will be less than $50.00 a month increase in your payment. Play Around on my financial Calculator
- Today’s interest rates are historically low and prices are increasing so fast. If you are planning on staying in the home for a while and you see your income increasing over the next few years, it’s usually a good decision to stretch yourself a bit financially. You will grow into the payment. 5 years from now, because of appreciation and higher interest rates, it may be impossible to purchase the same home without a substantial increase in your income.
The condition of the home and improvements you would want to make.
- Look at the obvious repairs that will have to be made on the home as well as the improvements you want to make. What will that cost? Do you have the money on hand to complete these projects? You may be able to save money in the bank for these costs with a lower down payment.
- Maintenance issues can always be a surprising issue. A leak in a pipe or the roof can cost quite a bit to repair.Just in case, be sure you have a reserve account.
How it compares to everything else you’ve seen.
- How does the home compare to everything else you’ve seen? Quite often this question comes up when a buyer want to buy the best home they’ve seen for the price of the worst house on their tour. Face it, it’s the best home you’ve seen. Be prepared for a price that reflects that.
What is it worth to you?
- You, the buyer, knows the market through your eyes better than anyone. Be honest with yourself and your agent. It can save a lot of drama and stress. Discuss your real bottom line.
- The next question is this, “If they counter you $10,000 more, do you just walk away? If you question that at all, increase your bottom line. Remember, be honest.
- The last question is, “What would it mean to you if you lose this house”? If you don’t care, it’s not the right house as it sits. It may still be the best house on the market for you right now and still worth trying to get it.
The key in deciding on your offering price and winning negotiations is trust in the abilities of your real estate agent. Your agent must have an understanding of the current market, trends in the housing market, pricing homes and negotiations. They need your honesty to be able to negotiate the best price and terms for you. Through the trust you place in your agent you will understand that they are on your side.
This is part of the counseling I give each of my clients before we start our property search. The “Buyer Experience Session” is an hour meeting to discover your real estate solutions. We go through the buying process, strategic financing tips and how we use the actual purchase agreements to protect you. Once we complete this session, We are ready to find your next home without the stress. Request and appointment today!
Posted by Tom Perry affiliated with Realty Executives Brio in Bellevue Wa. Tom stays in tune with the real estate market and the trends that drive it. His buyer and seller systems are well thought out and produce result for his clients. His clients learn that the best results achieved by planning, systems and thoughtful execution. Contact Tom when it’s time to start your planning to buy or sell real estate anywhere in the Seattle area.