Making a purchase offer on a home can be tricky- you want to get the best deal possible, but if you really love the home, you don’t want to risk having your offer rejected because you have submitted a low-ball offer that offends the seller. With that being said, it is important to understand the local market before submitting an offer. Your real estate agent can provide you with valuable information to determine what is a fair price for a home that you are interested in purchasing. Be sure to consider the following before you submit a formal purchase offer:

• Comparable sales in the area- In the real estate industry home values are based on what people are willing to pay for a house. Looking at what comparable homes in an area have recently sold for will give you a good idea of where the market is at.
  
  
• Condition of the home- There is a big difference between a move-in ready home and a fixer-upper. If the home that you are interested in buying will require a lot of work and money to update, you can offer the seller a lower price to compensate for this fact.
  
  
• Buyer’s market or seller’s market?- The market is constantly changing; in some cases it is a buyer’s market, and at other times it is a seller’s market. In a buyer’s market sellers are usually willing to negotiate on the price more in order to get their home sold. In a seller’s market a seller may receive multiple offers, so you should ensure that your offer is attractive in order to stand out and be accepted.
  
  
• How much can you afford?- One of the most important factors to consider when making an offer is how much you can afford to spend. This amount may not necessarily be the amount that you are pre-approved for. Carefully review your budget to determine how much you can comfortably spend each month on a mortgage payment, and base your offer around the total price that corresponds to this figure.

AS985