What to Offer
Whether you’re a first time home buyer or you’ve owned several homes, when it comes to the first offer price to the seller, there is always the question of “what should I offer?”
Home offer price too low:
Everyone wants a bargain, and when it comes to something as costly as a home, saving every way that you can is important. Most people are financing, so the lower the price, the less interest paid over time, and that’s a lot of money over 30 years.
However, depending on the seller’s personality and experience, too low of an offer may put you out of the game altogether. If they are insulted, they may just reject your offer and tell you to go away. If they’re more experienced or less sensitive, they will counter offer and you can keep the negotiation going.
Home offer price too high:
Nobody likes to “leave money on the table” either. Be careful not to fall in love with the home before you own it. Too much emotion clouds our judgment and can cause you to pay more for a home than you had to. It’s better to have a backup home selected that’s as desirable or very close. This gives you a different perspective going into the negotiation.
Your real estate professional will be able to give you recently sold statistics out of the MLS, Multiple Listing Service, that will show the average “sold-to-asking” price. It’s a percentage of the asking price at which homes are selling on average. You can use that as a guideline, but in the end, it’s your call as to what to offer.