Yesterday, I wrote a post on how to write an offer on a Logan UT home, and today I wanted to give you some more input on what to do before you write an offer. Here are the things I would recommend you do before writing your offer:
You’ll Need Market Information
Knowing the local market is essential to writing an offer. Using a professional Realtor to help you gather this information will give you an advantage over going it alone. Realtors have access to MLS data that you can’t find anywhere else. Sure, you can use sites like Trulia or Zillow, but their stats are way off compared to what’s really going on in the market.
Use the local trends to gauge if the market is going up or down, if the market is a buyers market or sellers market, and what the absorption rates are. Knowing what neighborhoods are “hot or not” should be taken into consideration. You don’t want to purchase a home where home values are declining due to an influx in foreclosures.
Having access to the MLS statistics for a community gives real estate agents negotiating power when they submit offers on your behalf. Without this data you could end up paying to much and the seller will be laughing all the way to the bank. Get the facts before you submit an offer.
Find RECENTLY SOLD Comparables
If you plan on using an FHA loan, when you get an appraisal, the appraiser will use market comparables that have sold within the last three months. Why only three months? Because real estate markets today are changing faster than ever.
One month we’re up, the next month we’re down, and the next month we’re up again. Also, as you try to gauge a descent neighborhood to purchase in, don’t put your faith in listing prices. A homes listing price is usually higher than a home sells for.
In fact, average list-to-sale price here in Cache County is currently at 92%. Which means, homes are selling 8% less than their listing prices. There are a lot of home sellers who still have their homes priced to high in today’s market. Sorry sellers, I do understand you’re reasoning, but the stats don’t lie.
How’s The Neighborhood?
As a real estate agent, I must follow rules, and due to fair housing laws, I can not answer many questions buyer’s have.
For example, many home buyers like to ask, “what are the demographics of a neighborhood?” I can’t answer this question. You will have to find out yourself by scoping the neighborhood in person or researching online.
Buyer’s like to know crime rates, I can’t answer that questions either. You must talk to the local police departments or reseaerch their websites for that data. What we can divulge as Realtors are housing statistics, foreclosure rates, and absorption rates. Or anything else related to factual housing data.
You can’t get MLS information from anywhere, and even some Realtors drop the ball when educating their buyers on market trends. Seek out a couple opinions from agents on how they view the market.
If you ask a Realtor how the market is and all they tell you is the market is great, they may not be a great agent for you. Look for agents that answer your questions with specifics, or agents that would rather give you research over blanket statements. Those are the agents you want to be working with. 
Sleep On It
Everyone has buyer’s remorse, it’s normal, and it usually passes. Before you decide to write an offer, I recommend you sleep on it if possible. Sometimes you have to act quickly and I understand those situations.
Getting ready to write an offer will bring on a lot of emotions, and taking a night to let them settle should give you more confidence in your decisions; whether you decide to move forward or not. Buying a home is an emotional experience. Trust me I know.
After 10 years of selling real estate, I have seen buyers cry in sadness, jump for joy, and look like they wanted to kill someone. You d0n’t want your emotions getting in the way of your negotiations. If you get angry with a seller you may lose the house. If you get too excited you might over pay.
Before writing an offer, consult with a third party you trust, whether it’s your buddy, lawyer, or a real estate agent. They can provide level headed advice that will keep you grounded. Now that you know what to do before writing an offer, I hope you do your homework. After all, this is only the biggest purchase you will make in your lifetime! Happy buying!!
