Looking forward to spring home buying season? Get some tips from LendingTree.com before you start.
Charlotte, NC (PRWeb) April 8, 2007 -- Finding the home of your dreams is exciting. Placing a bid to purchase it might be a different story. Buying a new home can often lead buyers into a major Goldilocks dilemma: is my offer too high, too low, or just right? But don't worry - the decision on how much to pay for a home can be as easy as doing a little homework.
So, how do you determine the right amount?
To get to the bottom of that question, LendingTree.com offers up the following tips.
Don't exceed your budget.
First, understand your budget. This is the most important rule to following: never offer more for a home than you can actually afford. Getting a pre-approval letter from your lender can help keep you in the ballpark of how much you have to spend, but keep in mind that letter details how much the lender is willing to lend you, not necessarily how much you can realistically afford.
Let your agent be your guide.
Real estate agents are in the business of knowing how much a particular home can and will go for in your local real estate market. He or she can guide you using information such as prices paid for other homes sold in the area, prices your market will bear, and how motivated the seller may be.
Reasons you might want to offer a lower price include a weak market and the possibility that the home needs some repair work not done by the seller in advance of listing the house.
Reasons you might want to offer a higher price for a home include: the home has the exact features you want, including some that aren't available in other area homes; time pressure; and if your market is a strong one characterized by multiple offers and strong demand.
Online home value estimate (HVE) and Competitive Market Analysis (CMA)
Automated valuation services on real estate Web sites are a popular resource for home price estimates. These tools rely heavily on historical home-sales data, but current market forces that might be affecting prices in your local area. An online home value estimate (HVE) will give you a good baseline to work from but also consider getting a Competitive Market Analysis or a CMA. A CMA will draw on your agent's experience in the area as well as recent sales data for the neighborhood you are buying. Each service is a free or inexpensive way to equip you with valuable information prior to making an offer on a home