5 Questions To Ask Yourself When Evaluating A Real Estate Offer To Purchase

5 Questions To Ask Yourself When Evaluating A Real Estate Offer To Purchase

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The "For Sale" sign is in the front yard, the home's been staged, and you've been vacating the premises anytime anyone wants to take a look at the property. Now - here is the moment you've been waiting for - your real estate agent has an offer! Whether it's exactly what you were hoping for or leaves a bit to be desired an offer to purchase is always a good thing. At the least it's a sign that there is interest in the home, at best it's a great deal as is (where do you sign?!), and most often it's a good starting point for negotiations.

Your real estate agent should be able to help walk you through the offer. He or she can point out its strength or any red flags, and explain the included contingencies. When it comes time to decide whether to accept, counter, or turn down the offer ask yourself the following questions.

1) Would you buy the home today for this price?
When you turn down an offer you are essentially saying that you would purchase the home for this price because you are going to hold out for more. The offer price might not be as high as you were hoping, but if it's more than you would pay for the home were you buying it in the current market it's certainly worth considering.

2) How qualified is the potential buyer?
Did the offer to purchase include a pre-approval letter from a mortgage company? A pre-approval letter is a good sign that financing won't stand in the way of closing the deal. A decent sized earnest money deposit also means that the borrower is serious and fully intends to follow through on the offer.

3) What will it cost you to accept the offer?
Is the offer enough to cover repaying your current mortgage and any other obligations on the property? If not do you have other resources to tap into to fulfill those obligations? If current market conditions make it unlikely that you'll receive an offer that will allow you to pay off your mortgage in full, you may need to hold onto the home until the local market improves or discuss the possibility of a short sale with your mortgage lender or real estate agent.

4) What will it cost you not to take the offer?
Consider what the home costs you each month you do not sell. If you have already moved or this is a second home that may be the mortgage payment, taxes, insurance, and utilities. Think about how many months on the market it would take to make up the difference between the current offer and what you were hoping to receive for the property. When you're still living in the home the expenses might not be that great as once you sell you'll have to incur similar costs when you rent or buy another home, unless you are down sizing.

5) How does this offer compare to recently sold homes?
One of the best indications of what you can expect to receive for your property is what others like it recently sold for. If the offer is much lower than other buyers have been paying you may want to counter with a number that is closer to current market value.

About the Author:
Anna Platz is a writer and marketing professional who helps mortgage companies promote their brands and products such as 5 year ARM rates online.



Article Originally Published On: http://www.articlesnatch.com


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