Select A Department:

Courses in this Department

How Ready Are You to Buy a Home?

Determining Your Dream Home and Finding It!

Factory Built Homes Are Worth a Look

Purchase Manufactured Homes with FHA Loan

How to Buy a Foreclosed Home

Pros and Cons of Corner Lots

Know the Neighborhood Before You Buy

Tune in to an Open House on the Radio

Finding a Qualified Broker or Agent

Shopping for a Loan and Choosing a Lender

How to Improve Your Credit

How to Survive the Loan Application Process

Making an Offer and Signing Contracts

Cancel Your Contract in 3 Days

Understanding the Closing/Settlement Process

Choosing Home Inspection and Settlement Professionals

Double Check Your New Home - The Walkthrough

Know Your Consumer Rights

Seniors Have Many Housing Opportunities

Preparing for the Big Day -- Relocating Moving

Make Your Home Your Castle - Cost Effective Redecorating Ideas


Settling on a Price

How to get the price you want.

How Much Will You Pay?

It may not be as much as what is being asked! It is time to settle on a price. You have probably already been through the pre-approval process and know your limit. Unfortunately, what you can pay doesn't have anything to do with the seller's price for a particular home. It is a completely different beast.

Your goal as a buyer is to purchase a home for the least amount of money you possibly can. A seller's goal is to obtain as much money for the home as possible. This is where settling on a price can become a little dicey.

Determining the Worth
Is it really worth what they are asking?

The first step is to determine what the home is worth.

Just because it has a high selling price on it, doesn't mean it is really worth all that money.

Ask your broker to pull up the real estate comps for the same neighborhood as the home you're interested in. The comp (or comparable price) should be for a home that is in the same neighborhood, with the same amenities and size. The comps will tell you how high the sales are for that type of home in that neighborhood. The more recent the comps are the better. You should also ask to see the original list prices for these homes. This will tell you the percentage of list price the sellers are receiving. This percentage will guide you in making your original bid.

Your First Offer
Lower It.

Unless you are in a very tight market with little room for negotiating, never offer the list price in your first offer.

You will want to offer at least five to 10 percent lower than the price that you actually want to pay.

For example, if you want to pay no more than $95,000 then your first offer should be somewhere between $85,500 and $90,250. This gives you room for negotiating.

Your Maximum
Know it before you begin.

Always know your maximum price before you start negotiating a final price. This will guide your negotiations. It will also give you a rational, emotion-free bottom line. You don't want to be cavalier when it comes to your finances. You must be able to walk away from the home if the price is too steep. In some cases, you won't have a choice. You can only qualify for a certain amount and if you can't make up the difference with cash, you are stuck with that amount.

Next Stop: Making the Actual Offer

This is nitty-gritty on making your offer.

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