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Determining
Your Offer Price
When you prepare an offer
to purchase a home, you already know the seller’s asking price. But
what price are you going to offer and how do you come up with that
figure?
Determining
your offer price is a three-step process.
First, you
look at recent sales of similar properties to come up with
a price range. Then, you analyze additional data, such as
the condition of the home, improvements made to the
property, current market conditions, and the circumstances
of the seller. This will help you settle on a price you
think would be fair to pay for the home. Finally,
depending on your negotiating style, you adjust your
"fair" price and come up with what you want to put in your
offer.
Comparable
Sales
The first step in
determining the price you are willing to offer is to look at the recent
sales of similar homes. These are called "comparable sales."
Comparable sales are recent sales of homes that compare closely to the
one you are looking to purchase. Specifically, you want to compare
prices of homes that are similar in square footage, number of bedrooms
and bathrooms, garage space, lot size, and type of construction.
If the home you are
interested in is part of a tract of homes, then you will most likely
find some exact model matches to compare against one another.
There are three main
sources of information on comparable sales, all of which are easily
accessed by a real estate agent. It is somewhat more difficult for the
general public to access this data, and in some cases impossible. Two of
the most obvious information sources are the public record and the
Multiple Listing Service.
copyright 2000 by Terry
Light and RealEstate ABC
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