I’m a mortgage guy, not a real estate agent. I lead a team of mortgage professionals. Together we’ve helped thousands of people buy homes by working on the financing side of the transaction. As our team works with buyers to navigate the approval process, the question often comes up How much should I offer as they consider purchasing a home.

Before I became a mortgage banker, I was a certified appraiser for 10 years. I started back when Bush 1 was president and rode that part of my career through the Clinton years. An appraiser, among other things, will take both a historical look at what people paid for similar properties and what the current climate is like for a particular type of home in a neighborhood or area.

Through 6+ presidential cycles, I’ve been helping folks purchase their dream or analyzing purchase activity in real-time.  The blend of the two career perspectives leads me to offer some input for you, the buyer, as you work with your agent to find just the right home for you.

I start with two thoughts to keep objectivity alive amidst things. I hope this helps bring some clarity.

  1.  Principle of Substitution (PoS)

This is a fancy way of saying “what else could I buy at this price?”

  • What are the differences?
  • What are the differences worth?

PoS is something that a person not emotionally tied to the decision would look at. Because they are not tied emotionally, they can look objectively at the data.

Your agent will be providing you good data so you can use PoS to your objective advantage. Spend some time with your agent to discuss your purchasing options with a PoS mindset. Use your home analysis tool, or a tool they provide, to make objective notes. Have the courage to put a value on the differences.

If your agent doesn’t have the ability to provide you with the data AND sit with you to make some objective observations, get a new agent!

  1. Market trending and statistics
  • What is the absorption rate of homes in your area/price point?
  • What is the inventory trend? Going up means homes take longer to sell, going down means the opposite.

The trends of supply and demand contribute significantly to pricing in every market. As inventory dwindles, there is often upward pressure on pricing. As inventory grows, the market can be stabilizing (price wise) and often slow down a bit (absorption rate).

The housing market is fluid. No one wants to buy at the peak and, conversely, everyone would prefer to buy at the bottom. If you’re buying your primary residence, timing your personal needs, amidst the ebbs and flows of the market, needs to stay paramount. Use the market trending data as a guide to empower your purchasing decisions.

Next week I’ll share some thoughts on Affordability and Personal Budgeting. If you have any questions for me, feel free to reach out anytime! Shoot me a note!

In closing – here’s my encouragement for the day: A fair price on the right house is always better than a great deal on the wrong house!

Wishing you well today!



I don’t believe I’ve discussed mortgage specific information here but, in case anyone is interested, my mortgage licensing information is Craig Thor Ronning, NMLS 37967. Yep – my middle name is THOR


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