I Want to Know When it is Good to Offer More Than List Price

If you want to know when it is good to offer more than list price, you must first know when it is not a good idea. It is not a good idea to offer more than list price if comparable homes in the area can be gotten at or below list price. It is also not a good idea to offer more than list price for a home if you are not planning to live in the area long-term.

The reason why you would not want to pay more than list price for a home, unless you will be there long-term, is that you will not be in the house long enough to retrieve your investment. You should always look at any money that you put into a home as an investment. If you look at it as an investment, then you will always look for a good return on your investment. Paying an additional ten or fifteen thousand dollars for a home, and then having to move in a year is not a good investment.

As always in real estate, you should consider the location of the house and whether there is possible for appreciation. You will have to determine what prices in the area were before the real estate crisis. If they experienced a drastic reduction, then you will need to determine why this happened. If it was simply part of the market correction, then you can probably expect the home to retrieve some of the value in the long-term.

If there are other problems in the area such as high unemployment due to industries and jobs having migrated, drugs and high crime, for example, then those problems will have to be resolved before prices can retrieve. You would be better off going to an area where there are not so many other issues causing downward pressure on prices.

You should also know your budget, and determine whether you can really make an offer over list price. The best thing that you could probably do is to get pre-approved for a mortgage loan. If you get loan pre-approval, you will know exactly how much you can offer for any give piece of real estate.

You absolutely need to know what comparable homes are selling for in the area where the house you are interested in is located. You have to determine whether the house is listed at fair market value, or above or below fair market value for comparable homes in the area.

Some owners will purposely put a house up for sale below market value in order to bring in more buyers. The more buyers who are interested in a given home, the more probability that the seller will get a market or an above market price bid.

Know your budget, know the market, know prices in your area and you will know when it is good to offer more than list price for a home. If you do not put in the time to really research and know what is going on in the market in your area, you will not really know when to offer more than list price.

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