This is the next post in my series discussing the end to end process of buying a new home in Dayton, Ohio. I began this series because new home buyers are frequently confused and overwhelmed by what to expect when purchasing a house. My previous post explained various factors a new home buyer should consider when looking for homes, and explained how to utilize search features to narrow down a list of homes to view. In this post, I will address one of the most nail biting periods of the home buying process- making an offer on a new home and waiting for the acceptance. Contact me today to speak with a real estate agent.
Dayton home buyers should let current market conditions influence their purchase offer
Once a home buyer finds the house of their dreams, it is time to discuss what offer to make with their real estate agent. Choosing what price to offer to the seller can be an anxiety inducing decision, particularly in a ‘hot’ market that favors the seller. Unlike buying most other things, the listing price- the price that the house is listed for sale at in the MLS- is not necessarily the price the home buyer wishes to offer. The amount of money that the seller offers will have to do with a number of considerations including the current market conditions, how competitive the market is in a specific price range, the buyer’s financing, and the level of motivation the buyer has to acquire the home. In highly competitive markets with low inventory, a buyer may consider offering the listing price, or over the listing price. In a more sluggish market, with many homes for sale and fewer buyers, the buyer may be able to negotiate a better deal and offer below listing.
For example, in Dayton, Ohio right now, there is low inventory in the market, meaning that there are fewer houses to buy then people who want to buy them. The median sales price for a home in the metro area is $133,950, and the average sales price is in the $150,000 range. This means homes that fall anywhere in the $120,000-$160,000 have a high level of competition, with multiple buyers looking at the homes. Many of the homes in this range are selling quickly; often before the house has been on the market for 90 days. Buyers bidding for homes in this range, have a higher risk of being outbid by another buyer who wants the same house. However, homes that are on a lower or higher price end- homes below $70,000 or homes above $300,000 – have fewer buyers shopping in these price ranges, and thus are less competitive to acquire. These houses stay on the market longer, and thus, a buyer may not need to worry about being outbid by another buyer to the same degree they would in the more competitive price range.
Dayton real estate agents can help home buyers navigate the negotiation process without losing the deal
When a seller receives an offer they have three options; they may either accept the offer outright, they may counter the offer with a higher sales price then was offered, or they may outright reject the offer. A seller may reject or counter an offer that they deem too low. Buyers may also request that the seller pay some or all of the closing costs, which a seller may agree to, reject, or counter. It is possible for buyers and sellers to go back and forth several times before they have a deal to which everyone agrees on.
What buyers may not know is that sellers do not have to play by any rules when they receive an offer, or multiple offers. If a seller receives multiple offers, they may either choose to ‘start a bidding war,’ and see if more money is offered on either side, or they could choose to accept one offer outright over another. Some sellers may be concerned with whether or not a buyer’s financing will go through, and may choose a buyer who is putting down a higher down payment, or making an all cash offer. Other sellers may not have an urgency to sell their home, and could be willing to wait for the offer that they want. Most sellers are reasonable, and have put their home on the market because they want it gone. But a savvy home buyer should be aware that a seller may reject an offer for any reason; in this frustrating scenario it is best to just move on.
Once an offer has been accepted, the deal is not officially ‘done.’ During the inspection period, buyers have the right to ask the seller to fix, change, or repair any flaws they find in the home. Again, sellers have the right to reject the buyer’s requests if they deem the requests unreasonable. I will talk more about the post agreement period in my next post.
There is no hard and fast rule when it comes to deciding how much to offer on a home. Your Dayton real estate agent will help you make that decision based on what comparable homes in the same neighborhood have sold for, the current market, your level of motivation to buy the home, and your personal budget. Putting in an offer can be nerve wracking; you want the house, but you do not want to over pay. Your real estate agent can use their expertise to help guide you through the process.
I also service Beavercreek, Centerville, Cincinnati, Clayton, Englewood, Oakwood, Fairborn, Harrison Township, Huber Heights, Kettering, Miami Township, Miamisburg, Riverside, Springboro, Trotwood, Vandalia, Washington Township, West Carrollton, and Xenia.