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The Art of the Deal - Stage One - Making An OfferOnce you have your financing in order (pre-approval), found the home of your dreams (this could take awhile) your real estate agent (a professional with plenty of experience) you are now ready to begin the process of purchasing your home. While each transaction varies, the process is usually in three stages.
Stage one is making an offer.
Because the real estate market is always changing, there is no exact formula for arriving at a sales price. In a seller's market (what we have experienced for about the last 10 years) there are more buyers than homes available. This causes the prices to go up and the buyer competition to be fierce. A buyer's decision on price is calculated by looking at other properties that have sold with similar characteristics, then finding out how many other offers there are. Keeping in mind if there are 5 other offers, each of those buyer's agents will be providing the identical information to their clients.
The final determination on price often depends on the buyer's motivation, limits of affordability and not wanting to keep repeating the process of looking every weekend, submitting offers and not being successful.
If this market slows down some, we might see the good old days where we can negotiate on the price. Structuring your offer to overcome the competition varies.
Compliments of Diane Verducci, The GRUBB Co.
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