Major Factors Influencing your Offer Price
Comparable sales information helps you to determine a base price range for a particular home. Adding in the various factors like property condition, improvements, market conditions, and seller motivation help determine whether a “fair” price would be at the upper limit of that range or the lower limit. Perhaps you will feel a fair price is outside of that price range.
The price you put in your offer to begin negotiations is totally up to you and depends on your negotiating style. Most buyers start off somewhat lower than the price they eventually want to pay.
Although your agent may provide advice and guidance, you are the one who makes the decision. The price you put in the offer is totally up to you, but beware that an offer that is too low can offend a seller and they will make no counter-offer. At that point your only option is to come way up close to what the asking price is in hopes they will consider your offer a second time around.
Ask your Realtor what the average percentage off the list price that homes are going for in the area. He will have access to this information through his local MLS. If you find out that homes are selling for about 8% off the list price, your best best is to shoot for that number a the end of the negotiations. That may mean offering 12% to 15% initially – but in the end it’s up to your best judgement.