It’s never easy trying to figure out how much you should offer when buying a new home. Although the housing market appears to be stabilizing, you never know whether or not prices will slip more, or begin to rise.

The one thing to remember today is, don’t buy for the short term or future appreciation. Buy a home that will work for you for years to come, at the best price you can negotiate, and for the interest rate and financing you can afford. Make sure you ask your agent, whether it’s me or anyone else, to give you a summary of what properties in the area you are interested in have sold for (including the list price, the final sale price, and how long it took to sell the home). It’s also great to have information on the average sale price over the last year. Overall, have prices declined or are they increasing?

During your home hunting education of the market, make sure you continue to get reports about market changes. If a home you have been looking at that was priced too high gets a reduction, and is now in your price range, make a point of looking at it as soon as possible. A new price, most always, attracts other buyer’s interests as well, so you will need to be ready to react quickly. If this truly is the home of your dreams, don’t let someone else steal it before you have time to react! A well-priced listing is likely to sell quickly. Be prepared for more than one buyer making an offer on the same property, and you may need to make an aggressive offer at near or over asking price, to secure the offer. Becoming knowledgeable about the Marin market enables you to know when to make a strong offer on a brand new listing, even though you may hear the overall market is not up to its peak.

However, it’s a different story when you find a home that has been listed on the market for months. It’s highly possible to offer much less than the asking price and then negotiate aggressively. But, if this one doesn’t work for you, be prepared to walk away and look for the next one. Buyers making offers that are contingent on the sale of their own home are many times disadvantaged, and usually have to pay more for a home than an all cash buyer who can close quickly. If you are in escrow, you will be in a much better position to bargain on the next one. The best bet though, is to have your current house sold and closed, as it removes any questions in the sellers mind and makes them more receptive to a lower offer.

So do your homework: go to as many open houses as possible, learn what is well priced and what is over priced, so that when the time comes, you, the educated buyer, are ready to make the right offer!

Posted by:  Rick Smith