Making an offer is a big moment in your home search. An offer can determine whether or not you get home.
If you risk going low, you could miss out on a home. If you risk going high, you could pay more for a home than it’s worth. There’s a fine line between those two places, you only want to pay for what the home is worth.
So how much should you offer? That’s all dependent on the market and the initial asking prices as well as the condition of the home. It’s not easy to always determine the right price, but in this post, we’ll help you determine some factors to consider when making an offer.
The market has a big impact on how you’ll write an offer. Before writing an offer, you’ll want to know what kind of market you’re in.
In a seller’s market, the sellers tend to hold the power. There’s a low inventory of homes and too many buyers vying for them. In this type of market, sellers are receiving offers at or above list price and even times getting multiples offers at the same time. Houses are generally going quickly, which means buyers are writing strong offers from the start.
In a seller’s market, you’ll want to bring your A-Game. There is no room for writing a low offer and seeing what happens. In all likelihood, any low offer will be disregarded. If you’re serious about a home, be sure you write a strong offer from the start.
In contrast, in a buyer’s market, buyers have the power. There’s a large inventory of homes on the market, so sellers are trying to do anything to attract buyers. In this type of market, buyers have a lot of negotiating power. They’re often able to get a home at a lower price.
In a buyer’s market, you’ll have more room to negotiate. There’s a better chance that you’ll get more of what you want in an offer. Unfortunately, Knoxville hasn’t been a buyer’s market in quite some time.
The number of days on the market will tell you a lot about a home. It’ll tell you just how much a seller may be willing to negotiate.
Has a home been around for 6 months with multiple price drops?
If so, there’s a pretty good chance that a seller will want to work with any offer that they get. At that point, the seller’s home has sat on the market much longer than most houses on the current market. Knowing that there’s an opportunity to write a low offer and to see what a seller wants to do with it. The key to success is to only write an offer within reason. When a seller’s home has had multiple price drops they’re probably already taking a hit on the home once commissions and closing costs are paid, so you don’t want to hit them too hard.
In contrast, when a home has only been on the market for a few days, that’s a different story. In the current seller’s market, there are simply not enough homes on the market for all of the home buyers. So when a new home hits the market, there are often multiple buyers vying for it. When that’s the case, there is no room for writing a low offer. Oftentimes, those offers are at or above list price.
Days on the market is a very important indicator of what you should consider when writing an offer.
Even in a seller’s market, there can still be unreasonable asking prices. Before jumping in and writing a full price offer, take a look at homes that have sold in the area. Is the asking price on the home reasonable?
Your realtor can help provide you with a list of homes that have recently sold in the area. Based on that information, you can get a pretty good feel for whether or not the asking price is reasonable or not. A realtor can help break down what features may make a home worth more or less. Things like the size of the backyard, upgrades, square footage, and the number of bedrooms and bathrooms will all account for what a reasonable price for a home is.
Based on that information, you should be able to come up with a price that is a reasonable offer. There are times where a seller does overprice a home to see what happens, so there is nothing wrong with writing a lower offer if you feel the home is priced improperly.
When you find the right house, you know it. In those scenarios, you may be willing to pay a little more to get the home that you want. There are other cases, though, where the home may need some work and you may only be willing to go up so high in price.
Keep that in mind as you make an offer on a home. Consider how badly you really want a property and take that into account when you write the offer.
Are you interested in buying a West Knoxville home for sale? If so, please do not hesitate to let us know. Rick can be contacted at 865-696-9002 or via email at [email protected]. Kati can be contacted at 865-696-1888 or via email at [email protected] Also, be sure to check out our West Knoxville Home Search Page to see what homes are for sale in the area.