HOW TO MAKE YOUR FIRST OFFER THE BEST OFFER
Making your first offer is an important step that needs a significant amount of preparation and analysis. Go in knowledgeable, with consideration of all the components of your price offer, when submitting a first proposal to the seller. You are not so much responding to their listing price as using your own factors in arriving at your offer. The two are not necessarily related. An instrumental component at this stage is a Comparative Market Analysis (CMA), a mathematical model to find out the value of your future home. Your real estate agent can provide you with this analysis. It calculates basic conditions, such as number of bedrooms, bathrooms, age of home, square footage, and lot size. Then, it compares the home to similar houses on the market in your area. This model will give you the average local cost, fundamental information to inform your offer. Once you know the average local cost of a home, add or remove the components that respectively increase or decrease its value. For example, you know that the current owners have recently changed all the plumbing in the house. Or, conversely, you know that their plumbing is 25 years old and is suspect. Obtain estimates for imminent repairs. Research market trends. Has the local market gone up or down over the last few years? Do people buy or sell more? Are there houses being built that will soon be for sale? For example, teardowns and new construction would indicate rising local home prices. Calculations and forecasts may take time and effort, but they will inform you and leave you with options to consider and choices. The real estate agent’s services will be very helpful here. A 39
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