Once you have found the right house, it is time to submit an offer! To make sure that you get your home for the best possible price and terms, we will use our skills and experience as successful negotiators. The following are factors to consider when submitting your offer for the Seller’s consideration.
One of the first things we will want to do in order to establish a fair offer price, is to compare prices of homes in the same neighborhood that are similar to the property you are considering. We will focus on the following areas: number of bedrooms and bathrooms, square footage, lot size and features, type of construction, property condition, and home improvements.
Once we have narrowed down the list of comparable properties, we will make the necessary time adjustments for changes in market conditions since the date of the sale. Consider the following:
Considered a “heated” market. This is created when demand is greater than supply – that is, when the number of Buyers exceeds the number of homes on the market. As a result, these homes usually sell very quickly, and there are often multiple offers (also known as bidding wars). Many homes will sell above the asking price.
Conversely, the slower Buyer’s market occurs when supply is greater than demand, because the number of homes available exceeds the number of Buyers looking. Properties are more likely to stay on the market for a longer time. Fewer offers will come in, and with less frequency. Prices may even decline during this period. Buyers will have more selection and flexibility in terms of negotiating toward a lower price. Even if your initial offered price is too low, Sellers will be more likely to come back with a counter-offer.
In a balanced market, supply equals demand, the number of homes on the market is roughly equal to the number of Buyers. When a market is balanced there aren’t many concrete rules regarding whether a Buyer should make an offer at the higher end of their range, or the lower end. Prices will be stable, and homes will sell within a reasonable period of time. Buyers will have a decent number of homes to choose from, so Sellers may encounter some competition for offers on their home, or none at all.
Together with your offer will be the Earnest Deposit. A deposit is in essence your “good faith” gesture to demonstrate to the seller that you are serious about buying their home. The funds from your deposit are applied towards the total purchase price of the property. Within 24 hours of acceptance of your offer, your deposit must be delivered to the title company to be held until the closing date. In Arizona, the deposit is typically 1% of the purchase price, and is in the form of check from your financial institution.
The Closing, or Possession Date, is the day on which your funds are transferred via your lender, to the Seller, in exchange for the legal transfer of title of the property to your name. It is also the day you get the keys to your new home! In most cases, this is Moving Day.
In your offer will be a list of items included or excluded in the sale. Examples of some of these are appliances, light fixtures, and window coverings. We will make sure to take a note of anything specific that you would like to request that the Seller leave behind.
A firm offer is one that has no conditions, and if accepted by the seller, is immediately binding. It is critical that you have done your due diligence and are 100% certain that you are prepared to buy this home prior to submitting a firm offer. Firm offers are most prevalent in bidding wars, where a buyer is aiming to make their offer the most attractive of the selection being presented to the seller.