Making an offer on a home
You have done your searching online, looked at homes that met your criteria for your new home. Found the home that you want to purchase and now it’s time for making an offer. So far so good agreed? We have to dispel a few things for you here.
In our experience with working with several hundred buyers over the years. We have found a few things out that are similar in most cases. A REALTOR® in the local market where you are has all the information needed to assist you in making an offer that is fair for you and the seller.
What Nick and Cindy Davis do for their buyers when they are getting ready to make an offer on the home that are going to purchase is:
We do a comprehensive analysis of all the homes that are similar within the same community to see what the median sales price in that specific community has been over the last 180 days. This way we can determine what homes should be selling for. What homes are selling for in another community or part of town is really irrelevant. Real Estate is very specific to the area that the home is located. Also comparing an Apple to Apple is so much better than comparing an Apple to an Orange. We will dial in our search to look at 10-15% plus or minus the square footage of your house with the comparables. We will look for details that are as close as possible. For example if the house you are buying does not have a pool, then we will not include pool homes in our search. We will then go over all this information with our client so they can make a decision on what offer they will make on their new home.
Normally when all this is done and our client is in agreement things go smoothly and their offer is accepted and then we start the home buying process. We would like to share with you some things that we have encountered throughout or real estate career that have caused our clients to not get the home that were making an offer on. Now, this may sound negative, and we want to ensure you we are not trying to be at all.
If you have a relative in another state giving advice on what offer to make. Here in the Tampa, FL area, this is probably not a good idea. As we explained prices are specific to location and not even close that we could compare what homes are selling for in another state like Los Angeles California for example. So to use statistics from somewhere else other than where you are buying really cannot even be considered.
Making an offer below market value as a starting point. If a home is priced over market value then we will be able to show that in our analysis. But if the home is priced right and the seller knows that because they listened to their REALTOR® and we looked at the sales and the prices are in alignment. This is not a good idea. Also since we have such a low inventory of homes in the Tampa, FL area. There is a strong possibility that the seller will receive more than one offer when a home comes on the market. Nowhere is it written that a seller has to request for highest and best offers if they receive more than one offer for their home. So it is possible that if they receive an offer that is better than your offer that they just accept the other.
Asking for Seller to pay 100% of your closing costs. What we are referring to is that in a scenario where a home is priced at $200,000 normally a lender will allow up to 6% of the purchase price towards the buyer’s closing costs and pre-paid items, so this can be up to $12,000. So even if the offer was at $200,000 the offer to the owner is $188,000. Just asking for 100% or all buyer closing costs not a wise strategy. It is not uncommon to ask for some assistance if it is needed. A suggestion would be if you do not need the assistance in closing costs and a home is overpriced. It would actually be better to offer market value for the home and pay your own closing costs. Because ultimately you would be financing the portion of your closing costs that the seller is paying. Because you would still be getting a mortgage for the full amount. And then paying interest on that money for the entire time you live in the house. Now if you do need some assistance and the home is priced right at $200,000 we would recommend an offer of $200,000 with 3% of purchase price towards buyer’s closing costs and pre-paid items. This way you are making a $194,000 or 97% of market value offer, which is a much stronger offer and will increase your chances on having the seller accept your offer.
Reducing the price based on things you want to change. This is typically a hard thing to explain so we will do our best. If the home is painted a color you do like, that is not a reason to reduce the offer amount. You want wood flooring in the bedrooms, these are actually part of home ownership and normally will not be something a seller will even consider. Now a good example of something you have to change or repair because it is not functioning as it is intended would be the Air Conditioner is not working. Something like this is something that if the seller does nothing to get it working will affect all future offers. Hopefully this made sense.
In summary, it still is a good time to be a home buyer in the Tampa, FL area. There are a significantly lower amount of distressed properties on the market now. Nick & Cindy Davis are ready to assist you in purchasing your new home. We will ensure that you do not over-pay for your new. You can always reach us at 813-300-7116 or email us at NickandCindyDavis@TampaHomesSold.com or fill out this contact form and we will reach out to you so we can get started. We look forward to meeting you soon.
