Finding a house you like is the easy part. Deciding what it is worth, how aggressively to pursue it, and whether you should buy it at all requires more work. Before you make an offer, there are a several important questions to ask.
1. Is the asking price supported?
The asking price is a starting point, not necessarily an indication of value. I look at recent comparable sales, competing listings, location, condition, size, lot, improvements, and other factors that affect what buyers are willing to pay. The goal is to establish a reasonable range of value before deciding where an offer should land. Sometimes the analysis supports paying full price or more. Sometimes it suggests the property is overpriced. The important thing is knowing the difference.
2. What does the listing history tell us?
A listing’s history tells a story. How long has it been on the market? Has the price changed? Has it gone under contract before? Several times? Was it previously listed and canceled? What did the seller pay, and when? None of these determines what a property is worth by itself, but together, they can tell us quite a bit about the seller’s position and how the market has responded. A house that came on the market yesterday requires a different approach than one that has been sitting for two months.
3. How much competition are we facing?
Value and offer strategy are related, but they are not the same thing. $600,000 may be a reasonable price for a given home, but if several buyers want it, getting it for $600,000 may not be possible. On the other hand, a house listed at $600,000 with little interest gives us more room to negotiate. This is why I want to know as much as possible about showing activity, competing offers, seller timing, and the overall market for that particular property. The question is not simply, “What should we offer?” It is, “What are we trying to accomplish, and what will it likely take to accomplish it?”
4. What Can (and Cannot) Be Changed?
It is easy to focus on the things that photograph well. New counters, cabinets, flooring, and fresh paint matter, but they are also relatively easy to change. Other things are not. Taxes, HOA expenses, lot characteristics, location, floor plan, major mechanical or structural issues, and proximity to things that affect resale can matter much more over time. Before paying a premium for what looks good today, I want buyers to understand what they can’t easily change tomorrow.
5. Will the next buyer see what you see?
This is one of the most overlooked parts of buying a home. You may love the house, but someday you may be on the other side of the transaction. The things future buyers will notice then are often the same things we should notice now. Is the location difficult? Is the floor plan unusual? Are the taxes significantly higher than competing properties? Are we paying a premium that may be difficult to recover? That does not mean you should only buy a house that checks every box. Few homes do. It means you should understand what you are buying and price those compromises accordingly.
Then we can talk about the offer
Answering these questions is important before deciding to write an offer. Sometimes the right strategy is aggressive. Sometimes there’s room to negotiate. Sometimes it’s best not to make the offer at all. The goal is not simply to win the house. It is to buy the right house, at a price and with terms you will still feel good about after the excitement of the search is over.