The price of any home is where the biggest battlefields in real estate will occur. On one side you have the seller who is strong and determined to get the most money that is available to him. On the other hand you have the buyer who is also bound and determined, though his determination is focused on saving every single penny he can!

This means that the seller will think nearly every offer is too low and the buyer will automatically assume that the price is too high. Unfortunately there is more than these two hurdles to overcome, you still have market trends and price increases or drops at will to deal with.

Many years ago when the market was at an all time low, buyers would not make any full price offers. Today if the market is good, you may have several offers on a property and offering full price may not be enough. In order to get the best experience in real estate you need to have an understanding of marketing conditions that are working in your area or the area that you want to buy. This will allow you to make an offer that is correct and will allow you to begin negotiations on the purchase of the home you choose. If you were to offer too low of a price, you could lose the property to another buyer that is well versed on the market value of the home. You may also end up insulting the home owners with such a low price that causes them to not wish to negotiate at all.

Once upon a time it may have been common for a buyer to take a small percentage off the list price in order to negotiate when they wanted to buy a home. A common percentage may have been 10%. Depending on how long the home had been on the market this could have been a major insult. The best way to see that you are not insulting the homeowner is to ask your agent about market values and the proper offer to make.

Check with your buyer’s agent and see if homes are selling at lower than their list prices and how much less they are selling for. One prime example of negotiation would be if you found out that other homes in the area were selling at 5% below their list price. This would allow you to bid 6-8% below the list price as it will allow some room for negotiation.

Another thing that you should consider is how long the home has been on the market. If the home is fresh on the market and there is interest from other buyers you will want to be more aggressive than if the property has been on the market for some time and has had little to no offers.

If you are in a major sellers market the problem will immediately become how much over, not under, are you will to offer above the list price in order to get the home you want. If there are numerous offers and they are all aggressive at some point you will begin going over the list price in order to negotiate for the home you’re trying to buy.

You need to find out how much over the asking prices homes in the area have sold for in the past and design your offer around the offers that have sold in the past. You do not want to be put into a position where you make the wrong bid because you are trying to get a home you want. Despite hoping to get the right home, it is equally important that you pay the price you deserve for that home. You need to be able to beat the competition and that means that you need to be prepared to make the best offer you can. When you are up against much competition you need to have the facts and know how to get the right offer out to get the house you want. You may only have that one chance to attract the seller’s attention.

When it comes time to make sure the homes is yours you need to make sure you are not bidding more than the home is worth or that you can afford. On the same side of logic you are not going to want to lose out on the home you want for just a few thousand dollars. In the end you will need to use your best judgment, look at the facts, and consider the ultimate goals and needs of you and your family for the future.

As with all this information and anything you find here, I hope you realize that I am here to help. If you need any information or advice, I can help you. All consultations are no obligation, free of charge because I am here for you!