Question: We are going to be buying a home this summer and have been getting advice from friends about how to make an intelligent offer on a property. We don’t want to look foolish, but on the other hand, we don’t want to pay more than we really have to. What’s the best way to negotiate?

Answer: The purchase of real estate is indeed a negotiated transaction and a little up-front education will help you when it comes time to make that offer.

 

Your offering price should be based on local market conditions and how well the house is priced. Find out how fast homes are selling and whether or not they are selling for close to the asking prices. It hot markets, well-priced homes sell for very close to the list price and in slower-paced markets the gap between the list and sales price may be considerably more.

 

In Summit County, the average number of days that a home was on the market in 1997 was 230 days and the average percent of list to sales price was 96%. These statistics should give you a handle on how to approach a seller with your offer. Keep in mind that the 96% statistic is an average, reflecting the fact that some sellers have stuck to full price with others negotiating more steeply than 4% off of the list price. In my experience, those homes that are perceived to be properly priced will sell closer to list price than those properties that are priced above the market.

 

Your Realtor can help by providing you with comparable sales information and by showing you comparable listings. I feel that the best way to understand value is to be familiar with similar properties that are currently on the market in the same price range. If you miss this important step and blindly make an uneducated offer, you could overpay for a property that is priced too high for the market.

 

Or, you could err in the other direction and make a ridiculously low offer and in doing so you might offend the sellers who then become tough negotiators. An even bigger risk in making an inappropriately low offer is that you could lose the house to another buyer who is better informed and who makes a more reasonable offer.

 

How much you can afford to pay for the house should also be taken into consideration. At the time you make an offer on a house, you should be prequalified for your loan. If you are not currently prequalified, talk to a lender before you make an offer to make sure that you can qualify for the financing you need to complete the purchase. Presenting your offer along with a letter of prequalification from your lender with definitely strengthen your position with the seller.

 

Additionally, find out what you can about the market history of the house, including how long it has been on the market, whether or not the current list price was the original list price and when the last price reduction was made. If the price was reduced some time ago and the house has still not sold, the sellers may be receptive to a lower offer.



 

For answers to your real estate questions, call Allison at 970-468-6800 or 1-800-262-8442. Email - [email protected] or visit their web site at www.SummitRealEstate.com. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.