The asking price for a house is not necessarily the amount you will pay. You can make an offer based on what you can afford, the current state of the local real estate market or how badly you want a particular house to begin negotiations with the seller.
Figure Out a Fair Offer
Your real estate agent can provide information on comparable homes in the area that were sold recently. That can help you figure out if the house you’re looking at is over- or underpriced or if the list price is reasonable.
It’s important to understand the seller’s mindset. If the asking price is low, the seller may be hoping to attract multiple buyers, trigger a bidding war and sell the house for more than the list price. A seller who set a high asking price may know that a buyer will make a low initial offer but may expect that the final sale price will still be competitive.
Make a Bid That Will Leave You Wiggle Room
You should have already figured out how much you can afford and what the maximum is that you’re willing to pay. Your initial offer should be less than that amount. That will leave you room to negotiate if the seller makes a counteroffer. You may also request concessions, such as a reduction in price, so you can make repairs.
If the list price is reasonable, you can offer that amount. The seller may accept your bid, even if someone else has offered more, if you can pay cash or close quickly.
If information on comps indicates that the house is overpriced, if the local area is currently in a buyer’s market or if the house needs work, submitting a lower offer can be a reasonable way to start negotiations. If you have found a house that you aren’t crazy about, but that meets many of your requirements, you may be willing to buy it, but only if you can get it at a bargain. In that case, you may decide to submit a low offer and see how the seller responds.
If the house has been on the market for several months and the seller has already reduced the price, making a low offer may be reasonable. The seller may be eager to move and may accept your bid.
In a seller’s market, you may have to offer more than the asking price, especially if other buyers are interested. You may also submit a bid above the list price if the house has an unusual feature or amenity that you have not seen elsewhere, is in a location that you consider ideal or you feel a strong emotional pull to it.
Ask Your Agent for Advice
Your real estate agent has an in-depth knowledge of the local market and can help you decide how much to offer. The seller may accept your bid or make a counteroffer. You may eventually come to an agreement or you may decide to walk away.