How to Know You’re Not Paying Too Much When Offering on a House

Posted by Grant Ostapowich on Tuesday, March 23rd, 2021 at 1:47pm.

For most people, buying a house is the single largest purchase they’ll ever make.  Wanting to ensure you get a good deal is only natural. But how can you really know? It’s not like you can ask the seller how much the other buyer is offering, and in a seller’s market there are likely to be multiple offers and competing bids.

Having said that, you still don’t want to overpay just because the market is hot. Of course, the price is not the only determining factor in deciding whether a home is a good purchase—location and condition are also integral factors. With that said, as your REALTOR®, I have many tools I use to help you ensure you get the best deal possible.  

Comparables

When you show interest in a property, and before we even discuss a price to offer, I will take into account all the recently sold, currently listed, and unsold properties that are comparable to the one we are looking at. I analyze homes that are similar in size, location, and amenities they offer, but also some others that are different. Is it considerably less expensive than a larger, nicer house? Is it more expensive than smaller, less attractive properties?

With my deep understanding of current market conditions and market history, we can work together to determine a maximum price you will be happy with and that I am confident will not be high for market values.

Neighborhood Impact

I also use my extensive neighborhood knowledge taking into account expected occurrences that will impact the values of homes in any specific community. Is there positive development planned, such as a major mall or a large new company moving into the area? In this case, the appreciation value of your home in the near to distant future looks good. However, if grocery stores and gas stations are closing down, the price should reflect that and the appreciation value of the home will likely be affected.

One thing to note is that new housing development can go either way. It can mean that the area is hot and likely to be in high demand in the future, thus increasing home values. Or it can result in a surplus of housing, which will lower the value of homes in the area.  

Professional Experience

Without even analyzing the data, a professional REALTOR®, like myself, who is very familiar with the area and the market will intuitively know whether a property is priced appropriately or not and what a fair offering price would be. You can’t really replace this intuition—it simply comes with years of experience.

 

Once you have an accepted offer, we will take further steps to ensure you are getting a good deal. Requiring a home inspector will ensure there are no surprises and that no expensive repairs are necessary.  We will also check permit history to ensure all previous work done to the property was permitted and passed inspections. 

The lender will also request a property appraisal to protect their financial interests. The lender wants to make sure they are making a wise investment. At this point, you can reevaluate the offer price and if necessary negotiate the sale price before closing.

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