The amount of the offer should be determined after considering the factors listed below:

• The typical sales price of homes in the area, which have approximately the same features as the home selected. The buyer can obtain this information by reviewing recent sales transactions at the local courthouse or with your real estate agent.
  
• The condition of the house and any repairs, or improvements, needed. The offer can acknowledge these items, and be adjusted depending on whether the buyer or the seller will correct them.
  
• The amount of money that the homebuyer is pre-qualified to finance.
  
• The availability of similar homes in the area in the desired price range.
  
• How long the house has been on the market. In many cases, if the house has been listed for sale for an extended period of time (3 to 6 months), the seller usually is willing to entertain offers less than originally expected.
  
• Has the price already been reduced? If the price has already been reduced, this is usually an indication that the seller is willing to accept less than originally intended.
  
• Is the seller considering other offers at this time? If the seller has several offers on the house now, and this is the house the buyer is really "sold" on, he has to make an offer that is closer to the asking price.
  

You cannot rely on the real estate agent alone for assistance in determining what to offer unless the agent is a buyer’s agent. Remember, in most cases, the agent involved is obligated to get the highest price for the seller. Often, sellers are willing to negotiate their asking price. This is not a hard and fast rule; seller flexibility on the sale price is based on many factors. Some sellers are firm in their asking price and the real estate agent may tell the buyer this. If the buyer can’t get the seller to come down to an acceptable price, perhaps the seller will make some additional improvements to the property if the buyer agrees to buy at the seller’s price.

Some buyers prefer to "bluff" or "low ball" the seller by offering a price that is well below what they are actually willing to pay. Though this strategy can sometimes pay off, it will occasionally backfire if the seller gets insulted and refuses to negotiate. It is better to be fair and reasonable.

The seller’s agent usually knows what price the seller will ultimately accept for the house. The seller’s agent may tell the buyer that he or she knows the seller will not accept the offer. Although the agent has a good idea of what conditions will make or break the deal, he or she is legally obligated to present all offers to the seller.

Table of Contents | Homebuyer Course Start Page | Find A Realtor | Budgeting To Buy a Home | Neighborhoods | Find Your First House | Inspect Before You Buy | Shop For a Mortgage Loan | Mortgage Home Loan Process | Credit Score and Credit Report | Home Mortgage Loan Closing | Being a Home Owner

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