Making an offer on a house requires a certain level of experience. You must be familiar enough with comparable sales prices in your area (typically referred to as comps) as well as the current market “attitude.” In a seller’s market, underbidding will cost you the deal; in a buyer’s market, overbidding can waste thousands of dollars you could have put to use making post-escrow improvements.
Moral of the story: Find an experienced realtor and when you’re ready to make your offer, consider the following tips:
- Perform a Comparative Market Analysis. The average homeowner will have a difficult time performing a thorough comparative market analysis. It requires financial, real estate and business acumen, and the information you glean from your findings plays a big part in making an offer that gets you the best deal without wasting a single dollar. Comps evaluate similar home, sold within a one mile radius over the past six months. Lenders won’t be apt to lend more than your local comps support.
- Meet in the middle. The smartest offers will be those that meet in the middle ground between the lowest and highest comps. If you really love a home with features that don’t typically show up in comparative analysis stats, you may want to shoot for the higher end of the spectrum if your budget allows for it.
- Weigh the attributes and detractors. A house on the corner of a busy intersection may sell for less than one with a park across the street. A home with considerable landscaping will typically sell for more than one with barren yards, even if everything else is equal.
Contact First Option Mortgage for a pre-approval and to work with a team who will always put your needs first when securing a residential loan.