Making An Offer

When the housing market is unpredictable, it’s really easy to second guess the best course of action when buying and selling. One of the biggest questions in this industry is… what’s a good offer? Of course, a lot goes into that answer: how long has the house been on the market, what’s the list price, and what is the local market like? 

Even when the market is wild, homebuyers are always going to want to score a deal. With home prices and mortgage rates going up, even minor savings can make a big difference in your monthly mortgage payments. However, if you come in too aggressively or wind up making a lowball offer, you risk offending the seller and being black listed. 

Here Are A Few Offer Strategies

First, determine whether you’re in a buyer’s market or a seller’s market. By and large, the entire country has been a seller’s market for the past three years. However, if you find yourself in a buyer’s market, you have a bit more leverage. Typically this means areas with higher inventory that tend to sit on the market longer than average. Generally this means it is acceptable to offer 10% under asking. 

In a seller’s market, though, this strategy won’t work. Home prices are selected for several reasons, both to appeal to a wide base of buyers and to attract people within a specific budget. Sellers are generally aware of their market, though. If it’s hot hot hot, they are likely anticipating multiple offers. If it’s a house you like, come in at asking. If it’s a house you love, consider going in just above. 

Lastly, pay attention to the time on market. Obviously if it’s only been listed for a few days, lowballing the sellers is not a good idea. But if a property has been listed for six months or more, or has had several price reductions, you can anticipate some flexibility.