The First Question Is Usually: How Much Should I Offer?
Clients often ask me, “How much under the listing price should we offer for this house we like?”
The best way to understand market value is through comparative market research. Professional real estate consultants review and study at least 40 to 60 listings, visit 10 to 20, and inspect 5 to 10 properties to develop a sense of relative worth for properties in a given area. They do this by attending Broker Tour to see all the new homes on the market. These Broker Tours take place on a weekly basis.
Additionally, various professional appraisal factors are use in determining the fair market value of a home. An AMI appraisal protects you with your chosen Lender because Lenders want to make sure that you don’t overpay for a home. If you over pay the risk for the Lender increases. If the home value does not meet the sale price in the eyes of the appraiser, they’ll let you know. At that time many things can happen. The Realtor can renegotiate the agreement sale price, or void the agreement and your earnest money deposit usually is refunded.
There are four basic factors that influence how sellers price their homes. Having knowledge of these four basis factors will help greatly in determining what to offer on the home you want to purchase.
1. Sellers Get Poor Advice
Some real estate agents inflate the value of the seller’s home so they will be selected as the listing agent. There’s a natural tendency by sellers to list with the real estate agent who gives them the promise of the highest selling price. Everybody wants to be sure they don’t leave any money on the table. It’s human nature.
When homes are overpriced, they
- Stay on the market longer
- Buyers are reluctant to submit an offer
- If days on the market exceed norm buyers think there’s something wrong with the house
- Home buyers start to present patently frivolous offers
- Worse the home may not sell
2. Sellers Set an Unrealistic Price for Emotional Reasons
These sellers believe their home is worth every penny of their asking price for their personal reasons. Sometimes they lose their objectivity and focus on features that seem more valuable to them (and not to the buyer). For example, the suede wall-covering in the master bedroom may not appeal to potential buyers. On the other hand it’s the “cat’s meow” to the sellers.
Additionally, some sellers, anticipating reluctance to buy, feel it’s a good idea to leave a little “wiggle” room in the asking price. Today’s real estate market isn’t like that anymore.
3. Sellers Price their Home at Fair Market Value
These sellers carefully and realistically study other homes for sale, and will consult with a real estate professional. they want to get a professional opinion about every aspect of their home. They price their home competitively, and it usually sells quickly at (or very near) the asking price. In today’s real estate market a well priced home usually sells over the asking price. This is because home buyers know value and will pay for it without negotiations.
4. Sellers are Motivated to Sell
When sellers want a fast sale, they price their home below fair market value. These homes usually sell right away, at or above the listed price. There are usually competing multiple offers. Sellers too know the current market.
Cliff Keith will help you decide the fair market price for any home. My job is to make sure that you have the tools and information you need to make an informed decision. I will provide a current Comparative Market Analysis, (CMA). I’ll help you every step of the way answering any of your concerns or question about the home buying process
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What to do next?
If you know of someone who may need my help what should you do? Here are 3-Simple Steps to take to make sure they get the best possible advice today. You want that for them don’t you?
1.) Take out your cell phone,
2.) Look up my number (650-346-7366)
3.) Call me immediately
When we speak, you’ll know the best possible way for them to get help they need. Once we talk they will have a fighting chance to win in this rapid paced real estate market.
Your introduction of them to me will be something they will thank you for years to come.
What you can do to help me out…
If you know someone who would improve their chances of buying a home from this information would you please forward this on to them? Someone like a work associate, a friend, a family member, or neighbor. When you think of anybody who is thinking of buying or selling their home would be the time to pass this information on to them.
Thank you in advance. I appreciate it.
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#howtopriceahome #offer #appraisalofhometobuy #buyingahomeTags: buy a home in redwood city ca, home pricing, sellers pricing