7 Questions to ask before writing an offer on a house

1. How much have similar homes sold for in the neighborhood?

An appraiser will determine the value of the property by looking at similar homes in the immediate area; however, that does not happen until after an offer has been accepted. In order to get an idea of what the appraisal will come in at, area comps should be pulled to determine what other homes in that area are selling for. Typically, an appraiser is looking for three homes that have recently sold and three homes that are currently on the market to use as comps.

2. What is the condition of the property?

The condition of the property compared to other comparable homes will determine the value of the property. If a property needs all new carpeting and painting, the value will be less than comparable homes that do not need new carpeting or painting.

3. Are there location issues with the property?

If a property is located next to a garbage dump or backs to a busy street, the value of the property will be less than other area comps. This is something to consider when writing an offer. Additionally, if the property is located on a golf course or pond, these are things to be considered as well that will affect the value of the property and the offer that should be written.

4. How many offers has the seller received?

If the seller has multiple offers on the property, then a stronger offer will need to be written in order to even be considered. Help from your realtor and area comps will help determine what a strong offer would be for that particular property.

5. How long has the home been on the market?

The longer the home has been on the market, may mean the sellers are motivated and willing to look at lower offers. You need to ask yourself why the property has been on the market so long: Are there pricing issues? Are there condition issues? Are there location issues? Then adjust the offer price accordingly.

6. How much did the seller pay?

While the amount the seller has paid for the home has nothing to do with what you will pay for the home, it does give an indication if values have gone up or down since the seller purchased the home.

7. How much does the seller owe?

If the seller owes more than the asking price, then you may be looking at a short sale situation or a situation where the seller needs to bring cash to closing in order to close. If it’s a short sale situation, then the purchase will take much longer and the value will be less for that reason.