You’ve found the one you love… the perfect house, that is. Congrats! Now it’s time to figure out how much to offer. Here’s how to get started:
Check out active listings in the property’s neighborhood. How do they compare to the one you love and what are their prices? Have they been sitting on the market a long time? These active listings should not be an indicator of what the home you love is worth (asking prices are just what the seller wants, not what a buyer is willing to pay), but they can help you better understand the market.
Homie provides free home valuation services for our buyers. This includes a home value report that compares recent sales data on homes in your area—generally those within a mile radius of the home you love that have sold in the last 3-6 months. The report contains properties whose size and features are most similar to the property you’re looking at.
The Federal Housing Finance Agency has a HPI Calculator on their website, which can give you a rough idea of how much a home’s value has appreciated since the last time it changed hands. You’ll need to know when the property last sold and for how much.
If you were to find out that your offer was rejected and someone else swooped in and got the house you love… what is the price that you’d be gutted to see it sold for? What’s your “I regret that I missed out on this house” price?
This question is especially important to ask when it’s a seller’s market and multiple-offer situations can be typical. You may not get a second chance to bring your best offer, so make sure you’re comfortable with what you’re pitching.
Lastly, be sure your offer aligns with what you can afford. By being pre-qualified with Homie Loans, you can make an offer that works with your long-term financial goals. It’s also important to understand that a change of $1,000 in the loan amount won’t change your monthly payment much. In fact, it can be less than $10/month depending on the interest rate and term.