Purchase Your New Home
You've found what you were looking for! Now it's time to make your initial Offer to Purchase. This is where your Buyer Agent can really help you. A good Buyer Agent will be adept at writing offers to win. A good offer is one that is acceptable to a seller in price, terms, and conditions, but is one that you feel comfortable with. A good offer is one where you, the buyer, are getting the property for the lowest possible price with the best possible terms and protections for you.
Your Buyer Agent should prepare by gathering the necessary paperwork and running a CMA (Comparative Market Analysis). A CMA is much like an appraisal where your Buyer Agent will run a report detailing the most similar properties in the area that are Actively on the market, Pending, and Sold within the last 3-6 months. This report will provide guidance as to what a good offer is on the home you want to purchase. Your Buyer Agent has a duty to help you identify the approximate market value of the property and to advise you on the most appropriate offer to make given your needs, the seller's needs and situation, the property's time on the market and the time on the market of other, comparables homes along with the relative number of properties available in a given market.
Value or market value is the price the market is willing to pay for a home taking into account the combination of location, price, condition, layout, amenities, and general economic conditions.
Inventory is the amount and available mix of homes on the market at a given time.
- High inventory is usually good for buyers and generally creates a "buyer's market".
- Low inventory is usually advantageous for sellers because there are fewer homes for buyers to choose from. This usually creates pricing pressure with multiple offer scenarios and, often time, results in "bidding wars" and offers made over the asking price.
Your Buyer agent should be able to advise you on the relative inventory level in a particular market. This is measured by "months of inventory" or "absorption rate".