The Asking Price: How Does It Jibe with a New Home Loan?

by Kelly Richardson
LoanPage.com Columnist

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If you are shopping for a new home, do you know exactly what is meant by the asking price? Here are the finer points of the asking price and how that figure affects your quest for a home loan.

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The definition of the asking price is the price at which someone who owns something is willing to sell it or where negotiation between seller and buyer can begin to reach agreement on the exchange price for the transaction. This is different from a firm price because it indicates some flexibility in the actual terms of the sale. While your new home loan is based on the actual price of sale, the amount of your mortgage will be somewhere in the ballpark of the asking price.

Asking Price: Mortgage Details

» Seller Limits. The asking price of a new home is usually close to the lowest price that a seller is willing to accept in payment.
» Offer Price. Once you have an idea about the asking price, you can apply for a mortgage that will allow for some wriggle room in the end.
» Pre Qualify. Your mortgage agent will relay the terms of your new home loan and how the asking price figures into the equation.

Knowing the asking price is only the first step in acquiring your new home loan. You should work with your agent to verify that the asking price is in line with the actual value of the home before you agree to a sale. Then take these figures to your mortgage broker in order to find a competitive home loan.

Asking Price & a New Home Loan

» Market History. Before securing a new home loan, find out how long the home you like has been on the market.
» Current Offers. Find out if there have been any offers for the home and how close they were to the asking price.
» Counter Offer. If you bid below the asking price, the home owner might choose to counter offer a higher price.

Ask your mortgage expert to explain in detail how asking price helps to determine the amount of your new home loan.

About the Author
Kelly Richardson covers the local education and technology scenes in major cities across the country. His articles appear in a variety of respected educational journals, periodicals, and e-zines. Kelly holds a bachelor degree in English and master degree in education from Georgia State University.

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