After locating one of the several homes to purchase the next thing is to decide on how much the offer price should be. The seller gives you an estimate of what he is expecting from the sale but you have to evaluate whether it is a reasonable price he is asking for. There is a procedure by which you would be able to determine the offer price to place for your purchase. Let us go through the steps which act as deciding factors in the valuation of the home.

How much similar homes are getting in the region

First guiding factor for you will be to check the sales figures of homes in recent time. Find out information about the homes with similar features to the one you want to purchase, similar features would be like, same type of construction, similar lot size, number of rooms, equal footage etc. Such an estimation technique is known as ‘comparable sales’. Such comparable sale figures are available from 3 different sources and can be easily accessed by real estate agent working for you.

1. Public records

The property deed after the completion of purchase transaction is recorded at the local county recorder’s office. The recorder’s office maintains sales information with additional data about the home for their own tax calculation purposes. A realtor can easily locate this information for you using title insurance companies as these companies take this information directly from the recorder’s office.

2. Multiple listing service

It is where properties which are for sale are listed by realtors. After the sale of any home the price for which it was sold is listed in the Multiple Listing Service. Such information is available to member agents of local MLS. There is a database of previous sales containing much more information than is available in public records.

3. Transactions which are pending

The more recent the available information, the more value it has. The public records do not have any information until the deed gets recorded, also after a house gets sold becoming a pending sale, the price is removed from the MLS listing until the sale converts into a closed sale. But real estate agents can access such information from the transaction board of brokerage firms after a sale completes and also if essential they can find out such sale price related information by way of professional courtesy from other real estate agents.

Open houses, appraisals and tax valuation

Going with the recorded data sometimes can not provide proper insight into the actual condition of the home. For that a buyer should attend open houses to know about the condition the house is in and the price it can get. The other way to know the value of the house is to have the appraisal done of the home before putting in the offer. Tax valuation can only provide you with a rough estimate of actual value the home may have as it provides general estimate such as houses in a community having tax value of about eighty percent of the market value. You should contact the assessor of taxes in your area for latest details about tax values.

Other factors which can influence the price

Some other important factors which can affect the price of the home are related to home’s condition, its age and neighborhood -

1. Chance that the seller would agree to lower the price of the home depends on whether the home is listed for sale on the market for quite sometime now or has been listed recently. If it listed recently chance of seller agreeing to lower the price are less.

2. If the house is in such a shape that it will need major repairs then you would be in a position to bargain for a lesser price than what other homes are getting in the neighborhood.

3. The real estate market in the region you are going to purchase your home, what the trend is like, are prices likely to go down or remain same? The prices if going down in the near future will allow you to wait for some more time before making your purchase offer.

Analyze all the information before deciding about your offer price like circumstances under which the seller is making the sale, home’s condition and market situations. And depending on how well you are able to negotiate, the fair price will fluctuate around the estimates you had received.