What a great question and important one to ask.
My short answer to what is a good offer is “it depends”. The longer answer involves factors like how many other buyers are also interested in this particular home. What is the inventory of homes like in the area or neighborhood that you have targeted? Are there lots of homes to choose from or is the inventory of homes down to almost nothing?
Here, in Ventura County, generally speaking for the county, inventory is low. Some cities, like Ventura have very few homes for sale and some very popular neighborhoods have less than a few.What is a good offer
In the case of few homes on the market, inevitably, there is going to be multiple offers. In this case, a buyer should make their best offer initially, both in price and in terms. Price is fairly straight forward.
What we mean by “terms” is all the other items, such as time frames to close, how many days will be allowed for inspections & contingencies before you the buyer remove all contingencies and move forward towards closing. Terms of the contract also will state which party (seller or buyer) pays for certain reports and repairs. The more a buyer (within reason) can accept the property “as is” and convey that to the seller, the more appealing the offer will be to the seller.
This low home inventory climate is a seller’s market and a buyer should understand that the seller will have many offers to choose from and is going to accept the offer that speaks to them the most, sometimes that means the best price, sometimes it means the offer with the best chance of closing.
The price portion of the contract is fairly easy to understand, come in at an attractive price, but within appraised value if the offer is financed, if it is an all cash offer, then appraised value becomes less of an issue because there is no lender involved, however, the all cash buyer can still request an appraisal.
The terms portion of the contract can make or break a deal. If there are multiple offers, write an offer with terms that will please the seller. For example, if the seller needs to find their Home of Choice (HOC) before they can move. If you the buyer can agree to that, this will please the seller. In most cases, the seller will not want to wait for the buyer to sell a home to buy theirs.
I am speaking in general terms, each property will have it’s own set of criteria that will guide the path of how to write a good offer.
I hope this helps answer the question of What is a good offer when buying a home?
Looking for a home, I can help you write a good offer on one, that is when we find the right home for you.
The infographic below is from the California Association of Realtors and it shows the result of their poll of multiple offers in 2013.