Help For A Home Buyer: How Much To Offer?

Posted on http://www.tommcgiveron.com/

I frequent the website, trulia.com. I am a Pro on Trulia Voices where homeowners, buyers, and others can ask questions about real estate and get multiple answers from an array of real estate professionals.

I recently answered a question and below is the exchange:

The Question:
Im looking at a house on long island that is asking $225,000. How do i determine a good first offer? The house backs to railroad tracks but has a had alot of cosmetic work done.

Michael David
Home Buyer
Mount Sinai, NY

My Response:
mike -

what are you willing to spend for the property?

of course - you'll say - "as little as possible" - but step back and ask yourself that question. determine UP FRONT what you want to spend. they're asking $225,000 - i'm sure THEY KNOW they're backed up to RR tracks.

knowing what sold when and all that stuff will help determine if you're getting a good "deal" of course.

yatayatayata....do you want to buy the home? If so - how much are you willing and ABLE to spend.

what's the monthly cost involved (how much, if any, mortgage payment can you afford?). now if you don't know what the answer to that question is - then YOU are not ready to make an offer on any property. if you do know - then you've done your homework and built a foundation for making a real estate purchase.

so to answer your question - "how do i determine a good first offer?" determine what you want to spend - MAX - HONESTLY - then offer a little less than that. define "a little"...3% less than what your max is.

your max might be $215,000 - for this house. after factoring in, how much you can afford and other considerations which might include - how much there is to fix in the house, your time frame for purchase, how long you've been looking already, stressors with your partner over looking for a long time (if that's the case), job, money, etc...

so say it's 215,000 - then offer $208,550.

Okay - now what?

N E G O T I A T E

Are you a professional negotiator? How will you present your offer? How will you assure that you literally are not over paying for the home? How do you know it will appraise? do you know your closing costs (estimates)? Do you have enough money in savings? Do you know a competent home inspector?

Now THESE are the issues you're up against AFTER you've determined the easiest part...how much to offer.

Email me http://tommcgiveron.listingbook.com/?&page=contact

If you're out on your own - you're winging it. Which is fine. Go for it. BUT - if you're making the largest financial investment of your life (which for most people - that's what a home is) - doesn't it make sense to really know what you're doing...or at least - have a pro helping you do it right? Seriously...Food for thought...

Either way man - good luck!!!

Web Reference: http://www.tommcgiveron.com/buyers/

_____________________________________________________

I just wanted to share the exchange with any of the buyers on my website because I thought the feedback was very pertinent to most buyers. That is a big question, "What to offer?" But there are other questions that are just as, if not more important when considering a home purchase.

One of the keys to making a serious decision to purchase a home is simply asking yourself:
How much you would spend on a particular home?
Can you afford the monthly payment?

It's like any other purchase, only a lot larger. I believe buyers get caught up in "getting a deal". But a "deal" is really a home you like and can imagine spending the next few years of your life living there. That's a deal...