How to determine a fair offer price for your home

For the last several years house prices have been soaring. It’s only recently that prices have begun to moderate. Still, some homeowners have not realized that a price change may be necessary in today’s buyers’ market to achieve a quick sale.

In any market, it can sometimes be a daunting task to determine what is a fair offer price when you are buying a home. Determining whether a home is priced fairly requires market research and some assistance from your REALTOR®. You don’t want to pay more than you must. There are a number of ways to get assistance on what homes are worth.

REALTOR®: Your REALTOR® can be one of the best sources of information on housing prices. Because he or she is intimately involved in pricing homes in your neighborhood, the agent will have knowledge of comparative prices (comps) and know how the house you’re considering falls in a comparative market analysis.

Choose a REALTOR® who is familiar with the neighborhoods you are considering. If you don’t feel like you and your REALTOR® see eye to eye, shop around for another one.

Get an Appraisal

An appraisal on the property by a professional appraiser will help you determine a fair price. This will involve an inspection of the physical property, square footage and amenities. Your mortgage lender will require an up-to-date appraisal to accurately determine the funds to lend.

Go Online

There are a number of Web sites that can give you comp prices in the area, including your local newspaper’s Web real estate pages. Others will tell you what the final price was on home sales around the property you’re considering. You can compare these sales to what you are thinking about offering, based on what the homes have in common. It’s also a good bargaining tool to have this information on hand.

Consider the Averages

Some real estate experts say that the average people pay on the offer price is 94 to 96 percent of the asking price. This means if you divide the price you’re planning on paying by the listed asking price, you should come up with roughly 94 to 96 percent. Therefore, if you’re looking at a home that’s being offered at $299,000 and you want to offer $275,000, your offer might be too low ($275K divided by $299K is approximately 92 percent).

Still, it is advised to offer a lower price early on to see if the homeowner accepts it, but to also leave room for negotiation. You may settle on $282,000 for the home, which is within the range of 94 percent.

By making an offer on a home with information gathered in advance, you’ll be more likely to get your dream home at your dream price.