Playing Let's Make a Deal on a New Home: How to Get Your Offer on the Table

Oh, the joys of buying a new home… there’s spending countless hours researching where you want to live, scouring the MLS listings for homes you may be interested in that also fall into your price range, touring x-amount of homes to determine if you like what you see and finally, preparing to make an offer on the home you’ve decided is “the one.”

As exhausting as the home-search process can be, it is equally exciting. And, the actual home-buying process can be that exciting, too. But, it also can be difficult to know exactly how to make an offer on the home of your dreams. In fact, before you even begin the process, your mind may already be flooded with uncertainties:

“How do I know if this home is priced reasonably?”

“What if there are other offers on the home?”

“How can I make a competitive offer in today’s market?”

“What if the seller blatantly denies my first offer?”

Certainly, it sounds overwhelming; but, there is a method to all of that “making an offer on a new house” madness and a reliable real estate agent will be more than happy to help you navigate through the process.

Some things that you and your real estate agent may take into consideration when you’re deciding what to offer on a new home include:

1. Comparative Market Analysis: This information is paramount in the offering process. Your real estate agent will research homes that are similarly located and appointed to the one that you are interested in. They’ll note the average of recent sales prices on homes that have similar numbers of bedrooms, bathrooms and square footage to the one that you are planning to make an offer on. That information will help you to decide what a competitive, fair offer may be.

2. Market Conditions: Your best home offer may differ dependent on whether the market in your area currently favors buyers or sellers. In a seller’s market, there may be a number of buyers who are competing for the same house, which will drive up offering prices. In a buyer’s market, your offer may be the only one that a seller has to consider; so, a lower offer may still be enticing.

3. Home Availability: After completing a comparative market analysis, you should know of some similar homes on the market. If there are a number of homes that are like the one you are interested in, but they are at a lower price point, your seller may be more inclined to accept a lower offer as well.

4. Length of Time on the Market: Understandably so, a home that has been on the market for five days may sell for a higher price than a home that has been on the market for 500 days. The longer a home is on the market may indicate how eager a seller is to complete their sales process; so, they may entertain a lower offer than a seller who has just placed their home on the market.

5. Seller Motivation: Sellers list their homes for a number of reasons and each of those reasons can influence their motivation to sell quickly or wait for a better offer. A seller who is relocating to a new area for work or other reasons may be interested in selling their home as quickly as possible, even if it means accepting a lower offer. A seller who is listing their home to move-up to a larger home may want to wait around to make the most out of their sale. Your real estate agent may be able to help you determine your potential seller’s motivation for listing their home.

6. Buyer Motivation: Your personal motivation to buy a home can also raise or lower the price that you’re willing to pay for a home. Do you need to move quickly? Do you have time to find another home if you lose out to another, better offer? How would you feel if you lost out on a home? All of these factors can influence the offer that you make on a new home.

7. Appraisal Value: Bank appraisals certainly can dictate home offers, because lenders will not allow buyers to take out more money than a home is worth. So, unless a buyer has enough money to cover the difference in the appraised value of the home and their offer, the offer must remain at or below the bank appraisal.

8. Interest Rates: Like it or not, interest rates can play a major role in the offer process, too. High interest rates actually can discourage some buyers from placing offers on a home, which can work to the advantage of other buyers. Lower interest rates may allow more buyers to throw their hat in the ring and make an offer on a home. So, with that consideration, buyers may have to adjust their offers to be competitive.

Buying a home is one of the largest purchases that many people will ever make, so it only makes sense that a lot of factors go into the process of making an offer on that home. Whether an offer is high, low or asking price, it is ultimately the seller’s decision which offer they would like to accept for their home. However, enlisting the help of a trusted real estate agent, who will help you to consider all influencing factors, is a great way to put your best offer forward.

If you’re ready to start the home search process or you need help making an offer on a home that you’re interested in, contact Berkshire Hathaway HomeServices The Preferred Realty to talk with an experienced real estate agent today.