How to Pay the Right Price for a Home
The Big Question: “What’s the Real Market Value?”
To find out what price you should offer for a home you want, first we do some research and determine what the property’s real market value is. (Notice I said value, not price.)
In other words, what is it really worth in today’s market?
The Market Analysis:
The best way to determine this is through a market analysis which looks at comparable properties. When I do this for my home buyer clients, we look at:
1)Similar properties that have sold recently.
We look at market time, the listing price compared to the selling price, and take into account the differences between the home you want and the ones you’re comparing it to.
2) Similar homes that are currently pending or subject to inspection.
While you we won’t be able to see the selling price since they have not yet closed, it does show us which homes got an offer at what listing price, and how long they were on the market before they did.
3) Similar homes that are currently available.
Keep in mind that recently listed homes that have not sold or received an offer may, or may not be, overpriced. (Time will tell.)
4) Similar homes whose listings have expired or been cancelled.
This generally shows you the range in which homes were priced too high.
We also do a Property History search on NWMLS, to see if the home you like had a listing that expired or was cancelled prior to the current listing.
Homes Generally Sell at Market Value
That might seem like an oversimplification, but it’s actually the definition of market value – the amount that the property is worth to most other buyers in today’s market. Once you have a firm idea of the home’s market value, you’re armed with the information you need to put together a smart offer.
What you offer then depends on the market conditions, how long the property has been listed, how strong you are in terms of financing, what the seller’s situation is, and a number of other factors. I work with you to maximize your strengths of your offer, and to negotiate the best possible price and terms for your purchase.
