DO YOUR HOMEWORK BEFORE MAKING AN OFFER
To ensure that you are making the right offer, one that the seller will likely accept, it’s best to do some research beforehand. If you feel there are multiple homebuyers interested in the property, conduct your research quickly, and get your offer in before it’s too late.
1. Find out why the seller is selling, if you can. This will reveal what kind of situation the seller is in; do they want to get out quick, or can they afford to wait for the ideal offer? This may be hard to find out as the listing agent will likely not want to divulge this information.
2. Analyze the market; is it a buyer’s or seller’s market? If it’s a buyer’s market, there will be fewer competing offers and a higher likelihood that the seller will be flexible on price and terms. If it’s a seller’s market, the seller can get choosey with price and conditions and will probably be entertaining multiple offers.
3. Ask your real estate agent for a comparable market analysis (CMA). This is a report that compares properties similar in configuration, age and location to the home you want to buy; use this to gauge what price to offer.
4. Analyze the list-price-to-sale-price ratio of homes sold in the last six months. Your agent can provide this report. Take a look at the numbers, are homes selling for more than their list price or less? The seller will likely do this as well and will expect the same differential from offers.
5. Determine the number of days the home has been on the market. The longer a home has been on the market, the more flexible a seller may be in terms of price and conditions. Keep in mind that it’s possible that the selling agent took the listing off the market and then resubmitted it as a new listing to keep it looking fresh and new.