Making An Offer

THE RIGHT PRICE   Before you decide to make an offer on a home, be sure you know what it is worth. You don't want to pay too much for a property, but you also don't want to anger the seller by making your initial offer too low. How do you find out what the home is worth? Ask your agent for a Comparative Market Analysis, or "CMA." This analysis will tell you what similar homes in the area have sold for during the past six months or more. The homes in the comparison should be of similar to the one you are considering in age, style, size, and condition. If the market is very active—lots of buyers and maybe not too many houses available for sale—prices may be a little higher than the CMA analysis indicates. Why? Because in an extremely active market, some sellers receive several offers to consider at once, which tends to result in a higher price. If the market is slow—not as many buyers as in previous months—then prices may be a little lower than the analysis indicates because sellers may be getting anxious. In either case, the CMA, together with the market knowledge and experience of your agent, provides a good starting point for your decision about the amount of an initial offer.. OTHER FACTORS What else goes into the offer? The price you wish to offer is an important component of the process, but it isn't the only one. Consider the following questions ...  your answers to each of them will have implications for the offer. The purchase price of the home is not the only cost to you. Your agent will give you estimates of closing costs, as well as monthly payment amounts for various price/downpayment scenarios. Your offer to purchase will include some of this information, as well as an indication of how you plan to finance the purchase. Sellers decisions and attitudes may be influenced by how solid your financing looks. How much deposit will you be making? How quickly do you want to occupy the home? How quickly can you get financing? Will you need to ask the owner to "carry back a second"? (This means you will ask the owner to loan you a certain percentage of the purchase price or specified amount of money, in return for a Second Trust Deed on the home.) If you need to sell your current house, will its escrow close within the next 30 or 60 days? or will you need more time? Will there be other loan contingencies? Do you need to request flood, earthquake, or other information? (or have these been provided already?) Has the house been inspected for termites? if so, are there certain repairs you would like the owner to make to the house? Will you propose that the owner give you an "allowance" for carpets, paint, or other items? Are there appliances, furniture, plants, etc., that you would like included in the transaction? (Did you really fall in love with the owner's miniature Dachshund?) How soon do you need a response from the seller? NOW WHAT? Your agent will assure that you have completed all the required documents and forms, that they are all in good order with necessary signatures, and that they are delivered to the seller's agent in a timely fashion. Meanwhile, one of your important jobs is to try to think about something else! Anxiety just won't help with this process.    For Buyers      |       HOME     |   E-mail: Jerry@Cox.org Copyright 1998, 1999 by Jerry Cox, GRI Page designed and created by Barbara Cox and Jerry Cox.