Home Buying: Researching before Making an Offer
By Sadiya Anjum
You may have finally found your perfect home and you are ready to make an offer. Needless to say, you will have to do some research on the actual value of the home instead of just deducting a random percentage from the asking price and stating the result as your offer. Irrespective of what the current owner paid for the home, the value of it may have depreciated or increased now. You need to base your offer on the status of the market today.
Here are some practical ways to research the value of the home and base your offer on it.
If you have an agent by your side, your job may be that much easier as he will know how to conduct the research as well as know how to make the offer itself. Ideally, he should guide you through every step until the house is completely yours. But even without an agent, research can be done with some effort on your part.
When you see an open house, attend it and start making notes. Viewing open houses gives you the opportunity to actually judge the real estate market. Once you find out that the house has been sold, go to the local courthouse and find out the sale price of the home.
Details of other homes’ sale price can help you judge the situation of the market. An official at the courthouse can help you dig out files and guide you in interpreting them. Make sure you look at houses that are similar to the one you are looking at. Prices of other similar houses may be fairly different from the one you are looking at. Perhaps one of the reasons could be fixtures and other items which may be included in the deal. You need to determine which fixtures the owner is planning to leave behind and if the price stated justifies the value of these fixtures.
Consider the condition of the neighborhood; if there are future developments lined up then perhaps it will be advantageous when you consider reselling later. If the condition of the home is bad, renovation may be required. This means the owner may actually settle for a lower price since you will have to shell out later for repairs.
Another important factor to take into account is the owner’s mindset for selling the home. Keen observation and some insight into his motivation for selling may help you make the right offer. For instance, if the home has been on the market for a fairly long time then you may be able to quote a lower price and actually clinch the deal.
Learn these details as they will help you see how plausible your offer is. Insubstantial research may lead you to make an offer which is too high or too low. Both ways you stand to lose. An offer which is too high simply means that you are paying extra. An offer which is too low can put the buyer off and not take you seriously or you may lose the home if there are others bidding for it too. So be smart and have concrete information to support your offer.
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