Since 2012, there’s been a consistent rise in home prices which is making new options for a lot of baby boomers and others nearing retirement.
According to CoreLogic statistics, the median Orange County home price has increased $267,000 since four years ago. Some home buyers see that as a signal to get themselves into a home. They’ll need to work with a good real estate agent to locate a suitable property and put in a purchase offer.
Agents who are representing buyers recommend that your offer should be based on the most recent sales prices of comparable properties in the area. This encompasses comparing all features of the properties to your prospective property.
Some examples of comparable features are: square feet, number of bedrooms and bathrooms, year built, location, lot size, parking, pool, etc.
The amount that you offer for purchase of a property should not be based on a percentage off of the List price.
Occasionally, after analyzing recent sales of comparable properties, you will discover that the list price is actually in line with current market values of similar properties that sold in the last 60-90 days or is even priced under current home values.
With this in mind, you shouldn’t expect substantial change from the list price. For that matter, if the property has appealing features, it’s not unusual for such properties to generate multiple offers or sell above the asking price, especially when inventory is low.
It is not a mistake to make an offer at the list price or above if the purchase price is at market value. The issue is many buyers have it ingrained that they’re not getting a deal. Some sellers understand this and simply list their home at a higher price to allow room for the buyer to negotiate. 
Your offer should not be predicated on modifications you would like to make. Make an offer based on the property’s condition and current market value. If the modifications, you’d like to make cost $100,000, you should not simply subtract $100,000.
Offer Mistakes
Offers that are unrealistic to the seller, like lowball offers many times do not even get a response from the seller. Some sellers are outraged by such an offer and it indicates you are not a serious buyer.
Do not base your offer on the home’s tax assessed value. The tax assessed value is commonly less than current market value.
Do not base your offer on how much the current owner paid for the property. The current market value is what you need to pay attention to, not their profit. They may have bought it 25 years ago which means they’ve probably experienced equity appreciation of more than 300%.
Do not base your offer on the property’s value when home prices were at their peak. The price it would have sold for in 2005 is not important today, stay focused on how much the property’s current value is now.
Currently, Orange County is in a market when inventory has been reduced, so, generally, there’s adequate data to review to figure what the current market value is. In certain neighborhoods, especially those that are close to the beach, property values are stable and experiencing appreciation due to sales activity, reduced inventory, and high demand, so worries about future price declines based on your offer are less important.
A high percentage of today’s buyers are making “All Cash” purchase offers for homes, so the anxiety about a repeat housing crash due to mortgage defaults is a huge mistake and should not affect decisions about offering close to list price, at list price, or above.
Anytime we work with home buyers, we start the search by providing full data about neighborhood property values they’re considering so that practical expectations are known, as well as an accurate, informed understanding of the market.