When making your initial offer to buy a home, there are several factors to consider. Determining your offer should involve several factors:

The Real Estate Market - Depending on the real estate market (IE- Buyer's market or Seller's market) will help you in determining this initial home offer. In a Buyer's market, there are more homes for sale than buyers. This giver the buyer a upper hand in the negotiations. During a seller's market, there are fewer homes for sale and more buyers interested in buying homes. During a sellers market, sellers are less likely to negotiate terms or price when selling their house due to the amount of attention their houses are receiving from buyers.

What homes sell for in the area - The sellers will most likely be aware of what other homes in the neighborhood have sold for. You should also be aware of the value of those homes. We provide you with a home values page to research this information.

The home's condition - Once you have determined the prices of other homes in the neighborhood, and compared that in relation to sqft, now let's determine this home's condition. When determining your initial offer on this house consider how much repair does it need, what will need to be done to make it what you want? Determine the age of the roof, and major appliances. Are there items of concerns that you might want to negotiate in your initial offer?

How long it's been on the market - A property that has been for sale for a lengthy time could mean several thing. There might be a problem with the home, it could be too over priced and the seller is not willing to negotiate, or the seller has just not received mush attention on their house by home buyers. On either case if the home has been on the real estate market for a while, then consider making a lower offer to allow for the seller to counter offer, or maybe even accept your lower offer.

Financing terms - You should consult with your mortgage broker or lender as to how your home loan is being structured. When determining your initial offer on this home, you should make contingencies for financing terms. There terms should include but not be limited to an appraisal contingency that states that if the home does not appraise for or more than the purchase price you can cancel the contract, or renegotiate the contract, and a contingency that allows for cancellation of the contract should you not qualify for the home loan prior to closing date. For many unforeseen reasons your loan could be declined. In this case you will want to be able to cancel the purchase contract or negotiate terms for an extension of contract to allow you to apply with a new mortgage broker or lender.

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Seller's situation - Is this sellers in a financial bind and needs to sell fast, maybe they are facing foreclosure! A quick public records search with your local government can get you some of this information. But always remember to ask the seller why they are selling the house?

By the time you're ready to make an initial offer, you should have a good idea of what the home is worth and what you can afford. Be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price and terms.

Lets continue to the next steps!