A Reader Asks A Common But Important Question

[an excerpt]

"My husband and I are in the market for our first home. We like our agent but she hasn’t been an agent for very long and she can’t give us a straight answer about how much below the list price we should offer. We don’t want to spend too much with the current real estate market. What do you think?"

Assuming you are in the greater metro Atlanta area, here’s what I recommend:

Only search and view homes that are within your price range. If you can afford a $200K house - don’t look at $225K houses in the hope that those sellers will come down.

When you find a home that meets your wants and needs, consider its relative value to other comparable homes that you have viewed. If this home compares favorably, then chances are it is priced properly. If it seems overpriced, it probably is.

Your agent should then do a market analysis of the recent sales of the closest comparable homes to get a feel for what kind of value an appraiser is going assess.

Then your agent should evaluate the current market for this home - taking the number of similar listings and absorption rate into consideration.

And finally, look for motivating factors. If the home is vacant, or if your agent can discover the seller’s motivation to sell… you can use that as the final tweak.

Some properties - recently listed at an agressive price - will sell for their asking prices… even in today’s market. There are seasoned agents out there that that price properties based upon the goals of their clients. Some clients want top dollar, while others want a quick sale.

So in closing, there is no magic percentage you can use to formulate a good offer. There are simply good methods at arriving at a wise offer.