How Much Should I Offer?
There are 3 questions you should ask yourself when making an offer. How much is the property worth? How much can I afford? What am I prepared to offer the seller? The offer may consist of several factors including:
- Closing Costs
Your agent’s marketplace knowledge will assist you in putting together the above elements to make your offer compelling. These elements consist of one or all of the above and are covered in more depth in the Negotiating section of the Ripco Real Estate buying process.
How much is the property worth?
This question is a misleading because it only considers one side of an equation. Before you answer it you need to know the property’s current value. The standard method for determining current market value is the comparable (or comps). This method estimates the value of your property based on what similar properties have recently sold for in your neighborhood and building. Your realtor can help you get a property’s comps.
Once you know what the current market value of the condominium is you can assess what it is actually worth to you. This can be a subjective evaluation. You may have wanted a top floor unit in a certain building or neighborhood for a long time – are you willing to pay more than the property is actually worth? Or the unit might be in disrepair but can fixed up – you see the potential for a long term profit – are you willing to pay the owner more than it is currently worth?
What am I willing to offer the seller?
This final question logically follows the other two. It is at this point that you can make an offer. We recommend you work with your agent to come up with the most creative combination of factors for a compelling offer. Use each one at your disposal – price, closing costs, cash, financing, timing and closing. We cover these factors in detail in the next section.