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When you prepare an offer
to purchase a home, you already know the seller’s asking price. But what
price are you going to offer and how do you come up with that figure? Determining your offer
price is a three-step process.
First, you look at recent
sales of similar properties to come up with a price range. Then, you
analyze additional data, such as the condition of the home, improvements
made to the property, current market conditions, and the circumstances of
the seller. This will help you settle on a price you think would be fair
to pay for the home. Finally, depending on your negotiating style, you
adjust your "fair" price and come up with what you want to put in your
offer.
Comparable Sales
The first step in
determining the price you are willing to offer is to look at the recent
sales of similar homes. These are called "comparable sales." Comparable
sales are recent sales of homes that compare closely to the one you are
looking to purchase. Specifically, you want to compare prices of homes
that are similar in square footage, number of bedrooms and bathrooms,
garage space, lot size, and type of construction.
If the home you are
interested in is part of a tract of homes, then you will most likely find
some exact model matches to compare against one another.
There are three main
sources of information on comparable sales, all of which are easily
accessed by a real estate agent. It is somewhat more difficult for the
general public to access this data, and in some cases impossible. Two of
the most obvious information sources are the public record and the
Multiple Listing Service.
What have single-family homes in your neighborhood
sold for recently?
This fast, free
Home Sales Report will help you
find out.
Obtain a Comparative Market Analysis (CMA) on your home,
CMA REPORT. |
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