So, you’ve spent weeks house hunting and you’ve finally found the perfect home for you and your family. But how much should your initial offer be? Should your offer start above, below, or at list price? Figuring out how much to offer on a house can be one of the most challenging parts of the homebuying process, but this Redfin guide breaks it down.
You, of course, want to come in with a competitive offer, but you also don’t want to overpay. Before deciding on an amount, consider these six factors and work with your real estate agent to help you dial in on the perfect offer price.
1. Are you in a buyer’s or seller’s market?
Before you get your heart set on a property, it is crucially important to understand if the market in your desired area is currently a buyer’s or seller’s market. A seller’s market can be tough for buyers and cost you more, especially if you allow emotions – instead of logic – to drive your offer decision.
- A buyer’s market is an area where more houses are listed for sale than active buyers ready to purchase them. This gives buyers the advantage, especially with a motivated seller, and is undoubtedly the best market to find deals.
- A seller’s market has eager buyers competing for houses as soon as they are listed for sale. This gives sellers the advantage as homes often sell quickly and above list price.
2. How much are comparable sales going for in the area?
“Comps,” short for comparables, are recently sold homes that are similar to the house you are offering to buy. Home sellers use comps to help them determine their asking price, while you can use comps to figure out how much to offer on a house.
You can find comps by looking at online real estate listings, but for more accurate and detailed information, you’ll want to rely on your real estate agent. This is because listings typically state the asking price of a home, but not the final sale price, which is more indicative of the market…