Make An Offer: 9 Guidelines for Hampton Roads

When it comes time to make an offer on a home, including a foreclosure or a short sale in Virginia Beach, Newport News, or anywhere in Hampton Roads, how do you determine a fair offer price? How do you know when the seller is asking too much?

Real estate agents understand the frustration associated with determining the right amount for your offer.  There are many things to consider, and there really is no standard value calculation.  For example, two identical homes on identical pieces of land, located on either end of a single city, may vary significantly in value.

There is a delicate balance between offering too much and insulting the seller with an unreasonably low price.  Your agent will help you craft an excellent offer. Utilize his/her expertise, and let him/her take the pressure off you. Here are some of the ways to estimate the approximate value of a home.

Ask your agent for a list of recent sales in your area. You may not realize just how much listing prices can vary from actual selling prices.  Your agent can provide a detailed report of homes that have recently sold in your preferred area.  The information contained in the report will include the listing and selling prices of each home.

With this information, you can determine the average difference between the listing price and selling price.  In some markets, buyers pay less than the seller’s listing price.  In other markets, buyers pay significantly more than the listing price. It really depends on the local market trends.  Armed with this information, you and your agent can better judge the market conditions.

Hire an independent appraiser. You may opt to have an independent home appraisal completed before you make an offer to the seller.  The general rule of thumb to follow when selecting an appraiser is that he or she should not be connected with either you or the seller.  This makes the appraiser a completely independent third party who should provide a more objective appraisal. Your agent should be able to connect you with a trustworthy appraiser.

What you can expect from an appraiser:

• The appraisal report you receive will contain information about the property and the surrounding area.  You will receive a list of three comparable properties in the area and a statement about the housing market at the time of the appraisal.
• The appraisal report will give detailed information about potential issues, including those that could seriously impact the appraised value of the home. If there are any serious problems or damage, it will be noted in the report.
• The appraised value will be included in the report.

Learn as much as possible about the seller. The more information you have about the seller, the better your chances of making an offer that is accepted the first time.  For example, ask your agent how long the home has been on the market.

Determine whether the home is over-priced. As mentioned earlier, real estate markets vary by location.  In some locations, sellers choose to list their home for a price that is higher than what they anticipate receiving.  Since you obviously cannot ask the seller what his or her bottom line is, you will need to identify local trends before establishing an offer price. If you find that a home is overpriced, offer a price lower than the listing. However, be sure to offer a price that will make the seller feel you are seriously interested. Your agent can provide an expert recommendation for offer price based on extensive experience and research.

Determine whether the home is under-priced. You may determine the listing price of the house you want is less than the listing prices of comparable homes. When this happens, the seller may be expecting you to make an offer higher than the listing price. Keep in mind that when a home is listed below its market price, an offer equal to the listing price may seem insulting to some sellers.  Your agent can help you find a balance between the listing price and an offer that will satisfy your needs as well as the seller’s.

Consider the Value of Contingencies. When you find an attractive home, realize that several other buyers may also be very interested in making an offer.  Therefore, determine ahead of time what you are willing to give up in contractual agreements and obligations to make your offer as attractive as possible to the seller.

Your agent can ask the listing agent whether the seller has obtained a pre-sale home inspection. If so, then you and your agent can evaluate the legitimacy of the inspection report by researching the home inspector.  If the inspection seems accurate and the inspector is properly certified, you might opt to waive the right to a home inspection.  You might also agree to allow the seller to remain in the home rent-free for a specific period of time after the closing. This is particularly useful when the seller is building a home or the closing is pending on the purchase of his or her next home.

Trust Your Instincts. Wise agents advise their clients to trust their instincts.  If you have found the perfect home and are thus willing to pay a premium for it, you may feel comfortable offering a high price in order to get what you want. However, if negotiations reach a stalemate and the seller does not seem interested in your offer, you might need to move on.

Become educated. Congrats! You’ve already begun by reading this guide. Every buyer and situation is different, so the best thing you can do is to become educated. Your agent can minimize cumbersome leg work for you by providing research about your preferred area. Having this information will make it easier to find the perfect home at price you like.

Keep in mind – you can search homes in Virginia Beach and Hampton Roads right here. You can get personal help and specific answers to questions by contacting us. Happy house hunting!