How to Determine an Offer Price When Submitting an Offer to Buy a Home
Don't submit a purchase offer on a home without reviewing the home buying tips in this home buyer's guide article.
For the home buyers, determining an offer price for the purchase contract is one of the hardest decisions they will make when submitting an offer to buy a home in North Carolina. As a buyer, you want to pay the lowest possible amount for your new home while also securing flexible terms like closing dates and buyer contingencies which meet your needs and protect your interests. With that being said, how can you determine the right offer price to submit to the seller?
The best way to decide on an offer price is to partner with a proven buyer’s agent who does the necessary research and provides you with expert advice for submitting a realistic offer to buy a home. When interviewing real estate agents, make sure to ask them about this process. Below are some of the steps your North Carolina real estate agent will take to help you determine an offer price for your purchase offer.
Offer Price: Start with a CMA (Comparative Market Analysis)
The first step when determining what to offer a seller for a home is to determine fair market value for that home. The buyer’s agent will do this by performing a comparative market analysis which looks at similar properties which have recently sold in the neighborhood. These comparable sales – or comps for short – not only help determine fair market value, but they also provide factual evidence to support your purchase offer price.
Understanding Market Trends to Calculate Offer Price
After determining fair market value with a CMA, your agent will consider real estate market trends in the region, city, and neighborhood to calculate your offer price. One factor to consider is whether your local real estate market is experiencing a buyer’s or seller’s market. Other market trends which will factor into determining an offer price include competition (sales inventory), average list price to sales price ratio, average number of days on the market and seasonal influences.
Time on Market Factors Into Buyer’s Offer Price
How long has the property you wish to buy been for sale? Has the seller reduced the listing price? If so, how long has the home been on the market at its current price? The answers to these questions will help you and your agent further narrow down the amount of money you are willing to offer to buy a North Carolina home.
Determining Offer Price: Seller Motivation and Buyer Motivation
After researching fair market value, taking into account real estate market trends and looking at the property’s time on market and pricing during that time, seller motivation can offer insight into determining a purchase offer price. For example, has the listing agent informed your agent that the sellers are highly motivated, flexible or have an urgent need to sell? Also, how motivated are you, as a buyer, to purchase this particular home? If you love the home, don’t pay more than market value, but you may want to present the seller with a strong offer right out of the gate.
Hopefully, you now have a better understanding of how to determine an offer price when submitting an offer to buy a home. If you have further questions or would like to speak to us about helping you find your dream home in Raleigh, Durham or Chapel Hill, please do not hesitate to contact us today.