Every buyer in the market has one goal in mind… get the best deal possible on the exact house that they want. Of course, there are a few problems… but like most problems, there ARE solutions.
exterior (Photo credit: lane.bailey)
The first problem is understanding value… To begin with, the quality of the deal is NOT measured by sale price v listing price. The list price and the value are NOT directly related. You might actually have a better deal in your hand at full price… or even above… with one property, while another might be over-priced at half of the list price. Compare the price you are getting to the value of the comps. Don’t forget to subtract (or add) for needed improvements, updates and other differences. That is what real estate agents do when they create a Comparative Market Analysis.
The second problem is being realistic… Sure, there is a chance that you might be able to get a property that has a realistic worth of twice what you will pay for it, but don’t expect it. Especially if you are looking for a property YOU are going to live in. If you are looking for a rental/investment property, then you don’t need to worry as much about the particulars of living in the property… only how it will work financially.
Third, learn the real market… You need to have a heart to heart with your real estate agent. You need to talk openly about the area values and trends. Not the national values and trends, not the state… not even the city or ZIP code, but the area… subdivision or neighborhood, as well as the price range. In the market areas I monitor, I see instances where the direction of the market in one price range is opposite that of the adjacent price range. The same thing happens with locales.
English: To Let in Dover As the estate agent would say , 'A property with potential'. (Photo credit: Wikipedia)
The fourth problem is REAL big. Don’t “just toss something out there as a starting point”. This one is huge. I see it all of the time. Buyers toss out an incredibly low offer “to get the ball rolling”. BUT, when working with an actual human seller, it often only serves to anger them and get them to dig in their heels. When dealing with an institutional seller, it makes them think the buyer isn’t serious. In either case, what ends up happening is that the chance of a deal gets slimmer… and if there is a deal between the buyer and seller, it might end up not being as good of a deal as if the buyer had made a higher initial offer. (BTW Sellers… this one works both ways… pricing too high often leads to a lower selling price in the end).
Finally… Be READY to act when you find what you want. It isn’t a deal if you leave it laying on the side of the road.
If YOU are ready, give me a call. Lane 678-200-5895…
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