When it comes to buying a home, everyone wants a good deal and no one wants to feel like they’re overpaying. However, we find that many buyers tend to focus on the list price of the home too often when trying to determine what price to offer that they believe will result in them getting a “good deal” on the home. For some, simply getting a home for $10,000, $20,000, $30,000 or more off of the list price would automatically constitute a good deal, but what if the list price was already $50,000 more than the home was worth in the first place? This may sound like an extreme example, but we’re using it to help buyers understand that a list price, in most cases isn’t what the home is worth, in fact it’s typically at least $5,000-$10,000 more than the homes true value.
In order to determine a home’s value, a buyer should focus on what homes have recently sold for in that immediate neighborhood and compare those sales with the subject property the buyer is interested in. If a buyer wants to get a “deal” on a home, they should first determine the homes true value based on those past sales, and then try to negotiate a lower price starting with that newly determined baseline figure.
Getting a deal is also more easily achievable when there is an abundance of homes on the market that meet that buyer’s needs and price range. If this is a case, a buyer can make a lower offer and not worry about offending the seller because they know that if their offer on a particular home doesn’t work out, there are plenty more out there for them to find.
For buyers who are on the opposite side of this scenario, they need to be more conscious of the fact that they may lose the one home that they have found to meet their needs in the past 3, 4, 5 or more months of home searching and may have to wait just as long until the next right home comes along. In this case, there may be some added value for a buyer aside from the price even though the home itself may not be a tremendous deal in itself. It’s simply the effect of supply and demand. If a buyer has been searching for a home for months and finally finds the right one, it may not be the time to be thinking about getting a deal, but rather figuring out the best way to come up with a fair price that the seller will be willing to accept.
There are number of other scenarios that can impact how much a buyer should offer on a particular home. If you or someone you know have questions about the process of buying a home, negotiating a better price or determining what a home’s true value is, give us a call at (602) 777-MOVE or email Info@TheCarenTeam.com and we will be happy to help!Posted by Matt & Shalin Caren on