|
Home / Finance / Real Estate / Buying
Selecting a Good Price for Your Home Purchase
By:Ki Gray
Establishing a good price to offer on the home you have selected is a big step in reaching the goal of actually buying the right home for you. Your Realtor has helped you select the right Lender for your portfolio and has also worked with you to select a good neighborhood and to understand the current dynamics of your real estate market. Now you need to begin to put all this together to craft a price point to use in your negotiations with the Seller. Selecting a good price to submit as your offer is a key point to your success in securing a contract and in closing the transaction. In addition to the price, there are other important factors to consider at this time, such as amount of down payment, options, contingencies, a feasibility period, etc. but first let's consider the price point.
The price point is the maximum price you are both willing and able to pay for the home selected. How much are you willing to pay for right house? How much are you able to pay? These numbers may vary depending on the transaction at hand. For example, for a multitude of great reasons, you may absolutely want the house. So, you are willing to pay "what-ever-it-takes" to close the sale; but in reality you are only able to afford a finite amount. Or, you have a letter of credit that ensures you are able to afford any house you want but how much are you willing to pay for this size house, in this neighborhood at this time in the market cycle?
The "Right" price brings your willingness and ability in sync and is a price that will keep the Seller at the table to agree to a Contract for the Sale. It should reflect current and expected market conditions and be reasonable. You do not want to insult the Seller who listed the house at their (hopefully realistic) price point and you do want to open the door to negotiation. At the same time some sellers are unrealistic about price or don't accept that they might be in a poor market. At this point you need to look for a seller with more reasonable expectations. Once your price point is defined you are almost ready to make an offer. You should now review you financing strategy and determine how much of a down payment you want to make. With a large down payment, the amount to be financed will be less. Your willingness to select the right down payment amount will impact your ability to hit your price point.
Unless you are going to pay cash for the house you will need to make a down payment of 0 - 25% of the sale price and finance the remainder. If you have great cash reserves to put at-risk, a 0% down payment may be available. A 20% down payment may be required in order to avoid mortgage insurance payments. In other instances, the down payment is a fixed percentage of the Sales price, perhaps 5% or 10% and has been pre-determined by the Seller or the Seller's Agent or perhaps the Lender. Discuss this with your Realtor, and then move forward with a clear understanding of your financing plan.
In addition to price and down payment, you may want your offer to include a contingency on finalizing your financing, or on your ability to sell you current residence, or in consideration of other factors. The sale may also require an appraisal, a survey, an inspection, definitely a title search and possibly a feasibility period. (The feasibility period is a defined period of time in which you verify certain factors and information to determine the impact all this new information has upon you decision to purchase.) Your Realtor will be able to help you with all of these considerations. It is very important to have selected a Good Realtor early in the process.
Armed with this information, you are now ready to make an offer. Remember, the offer will include a sales price and any option or feasibility period, general financing or other contingencies. The seller will respond with acceptance or a counter. Should the seller counter, then you do a bit of back and forth negotiations until you come to agreement on your contract to purchase. With the negotiated agreement all parties will sign and initial, contingencies excepting, a closing date will be set.
Digg
del.icio.us
Blink
Stumble
Spurl
Reddit
Netscape
Furl
Article keywords: real estate, buying, realtor, realty
Article Source: http://www.articles2k.com
Ki lives and works in Austin Texas. His site Austin Real Estate Properties is a source for information on Austin Homes along with general information on the state of the Austin real estate market. A free mortgage calculator is provided to help calculate monthly payments on a potential home.
|
|
| Top Buying Articles |
|
|
- 2). When To Buy A French Property By : Howard Farmer
France still remains a popular place to buy a second home or retirement home. September and October are good months to look for property in France - this article highlights the advantages.
|
|
|
|
|
- 5). 7 Reasons To Choose Palm Coast Florida To Build Your New Home By : Tom Beaty
Numerous benefits of residing in Palm Coast, Florida, with the intention of educating today’s Florida home buyer on the numerous advantages of purchasing or building a home in this area. Climate, sports and recreation, proximity to amenities and surrounding cities, outdoor activities and natural beauty are all featured as advantages to living in this small Florida city.
|
- 6). How TO Buy A Foreclosed Home By : Gregg Hall
Foreclosure begins when a property owner defaults on the mortgage of a property, mainly due to financial difficulties or the inability to keep up with the mortgage payments for some reason or another. In the event that a property succumbs to a foreclosure, it’s most likely that the property has not been maintained as it should have been.
|
- 7). Why Your Florida Home Should Be A Poured Solid Concrete Home By : Tom Beaty
There are advantage of buying or building a concrete home, there are many other benefits to building with concrete, and especially steel reinforced, poured concrete, that the average Florida home buyer may not be aware of. Solid concrete home are able to withstand hurricane and tornado force winds, are resistant to heat, fire, water damage, wood rot and insect infestation.
|
|
|
- 9). The Truth Behind Paying “Points” For Your Next Mortgage By : Tabitha Naylor
Are you getting ready to buy a new home or refinance your existing one? Confused by what is actually meant when someone says you can “pay a point for this rate”? Don’t worry, real estate jargon can be quite confusing, when not thoroughly explained. This article dispels any myths you might currently hold when it comes to paying a point for your next mortgage.
|
|
|
| New Buying Articles |
|
|
- 2). How To Retire Well in Mexico By : Christine Harrell
For years, Americans have entertained the idea of retiring in Mexico. But today with the rising cost of living in the US, more and more people are buying property in Mexico and enjoying their retirement years for far less than they could north of the border.
|
- 3). When To Buy A French Property By : Howard Farmer
France still remains a popular place to buy a second home or retirement home. September and October are good months to look for property in France - this article highlights the advantages.
|
- 4). Despite Slowdown California Home Prices Set New Record By : Andy Goldman
For the month of June 53,700 homes and condos were sold statewide in California in June. The pace of resale’s has picked up a little from May and has increased 3.8% in one month. In the broad picture home sales have decreased 20.7% from the same period last year.
|
- 5). The Truth Behind Paying “Points” For Your Next Mortgage By : Tabitha Naylor
Are you getting ready to buy a new home or refinance your existing one? Confused by what is actually meant when someone says you can “pay a point for this rate”? Don’t worry, real estate jargon can be quite confusing, when not thoroughly explained. This article dispels any myths you might currently hold when it comes to paying a point for your next mortgage.
|
- 6). Get 20% More For Your Real Estate By : Tom Beaty
The importance of landscaping in today’s competitive Florida real estate market, both for the Florida home seller and the Florida home buyer. Topics include study results on the value of homes on treed lots vs. homes on barren lots. Also, quality of landscaping items and the effects on home value are discussed
|
- 7). 7 Reasons To Check Out Your Real Estate Agent Before Hiring Them By : Tom Beaty
Qualities of good, reputable Florida realtors, and why it is advisable for the Florida home buyer to shop carefully before choosing a realtor. Areas of focus include trustworthiness, willingness to answer any and all questions, ability to communicate, sensitivity to the buyer’s needs, and willingness to supply references.
|
|
|
|
|
|
|
|
|
