Homebuyers Need To Nail Best Offer Price

Bargains abound in today’s real estate market, and buyers rule — but not necessarily lowball offers.

Steep price declines are driving a selling process now more like 2005’s boom market than a bust. Priced-right properties at the lower end of the market get multiple offers and sell in days.

Buyers must formulate offers that stand out. That means offering the right amount, sometimes above asking price. And it means getting pre-approved for a loan and not making nit-picky requests of the seller.

The steep decline in home values is fueling the clamor. Prices fell 18.1% from April 2008 to April 2009, according to S&P/Case-Shiller’s latest report, covering 20 major U.S. cities. That index is off roughly 33% from its peak in Q2 2006.

April marked the third straight month that the decline wasn’t a record — a small glimmer of hope for those who want to believe the market is improving. Whether one believes the market is nearing the bottom or not, multiple offers are commonplace on modest properties.

Buyers need to review comparable sales, no more than two months old, when trying to formulate an offer price, agents say. And comparables should be equivalent homes in the same neighborhood or very nearby.

Agents say in this era of tight mortgage lending, a buyer must supply a pre-approval letter with an offer. It should show the buyer’s pre-approved for the asking price of the home. A pre-qualification letter isn’t good enough.

On hot properties, buyers must be willing to put an offer in within a day or two of the home coming on the market.

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