Making an offer on a Mammoth Lakes home is a decision that shouldn’t be taken lightly. Offer too much and you may overspend and feel buyer’s remorse. Offer too little and you could get passed by. Fortunately there’s a bit of real estate science to it.
The amount you offer should consider these factors:
1. What have comparable properties sold for in the past three months?
A comparable property is one that has similar square footage, number of bedrooms/bathrooms, amenities, neighborhood, etc. In Mammoth Lakes, other things to consider in “comps” are the view, the HOA cost and the zoning of the area. Your agent should compile a list of comps for you and take into consideration if the sales were regular sales, bank owned or short sales.
2. What condition is the property in?
In Mammoth Lakes, development boomed in the 1960s and 1970s. Many homes have been beautifully renovated, while others haven’t been touched since they were built. Is the property the nicest one in the neighborhood or complex? Or does it look just like it did in 1970? What types of upgrades or improvements has the current owner done? What about the complex? Look for a project that is well-maintained will little deferred maintenance.
3. How long has the property been on the market?
If a property was just listed, the seller might not have any offers yet and might be hopeful they’ll get their asking price. If it’s been on the market for several months, the property may be over-priced. Your agent can provide some insight by talking to the seller’s agent and seeing how eager they are to sell. Various life events can cause a seller to become more or less motivated to sell, so see if you can get the inside scoop. The seller probably won’t go for an offer that’s more than 5% under the list price unless it’s been on the market for a long time and the buyer has very few contingencies. Of course this all depends on how appropriate the property was priced initially.
4. Do you have any contingencies in your offer?
Offers that depend on an appraisal, financing coming through, or the sale of your current home make offers less attractive to the seller. A seller would rather take a comparable offer with no strings attached than worry about your uncertainties. If you have contingencies, consider offering a higher price to encourage a seller to take your offer. Another consideration is the length of escrow. Some sellers may want a quick escrow while others want to get in one last trip to Mammoth before closing. Your agent can help uncover the goals of the seller.
So what do you actually DO with these four things? Start with the lowest price of the comparable properties (#1). Add or subtract based on the condition of the property (#2). Based on the seller’s motivation (#3), you can add or subtract as needed. If you have contingencies (#4), consider increasing your offer.
I love finding people the perfect home or second home in Mammoth Lakes. Learn more about buying a home in Mammoth Lakes with my Ultimate Home Buyer’s Guide. Give me a call if you’d like to talk: (760) 914-4664.