Cathy's Home Buying Tip #5
How Do I Know What to Offer?
So you have found your dream home in Northern Kentucky and now you are struggling with how much to offer. How do you really know what to offer?
A lot of good deals on the market come from analyzing up front what the actual, current market value of the home may be. As a buyer, you want to always obtain a good deal on your home purchase and that means not paying more than fair market value. However, if you are in a seller's market, you may be up against other buyers offering over full price. If you are in a buyer's market, you may end up under bidding.
Together with your agent, you will take a look at what has been selling and what is currently available in the market during the past 6 months and within a 1/2 mile radius around your target home. This is exactly what the appraiser for your lender will be doing once you are under contract and have completed your home inspection.
You will want to key in on homes that mirror your approximate square footage, number of beds and baths, acreage, etc., along with other outstanding characteristics such as brick, vinyl or wood construction. What you trying to accomplish is to come up with a reasonable price range that your subject home should fall in and compare that price to what it is currently being listed to determine whether the asking price is too high, just right or a little below current market value.
An experienced agent should be able to provide you data on all these comparisons, more commonly referred to by agents as "comparables" or "comps". Be sure to obtain and review this data with your knowledgeable agent so that you can decide what would be a good offer for you.
As you can expect, no matter what you offer, you may receive a counter offer from the seller. Evaluate all counter offers carefully and give a timely response if you wish to keep the offer going. Just know that while you are negotiating, you do not have a legal contract with the seller as yet. Should another buyer come in with a better offer, the seller may accept that one over yours and you can be bumped out!