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- DETERMINING YOUR OFFER PRICE WHEN BUYING:
- you know the seller's asking price but what to offer?
- consider COMPARABLE SALES, CONDITION, MARKET and SELLER'S
SITUATION
- COMPARABLE SALES:
- compare the home for sale (the "SUBJECT") with other,
recently sold homes called "COMPS"
- make ADJUSTMENTS to the COMP prices for DIFFERENCES between
them and the SUBJECT
- ADJUSTED COMPS are WEIGHTED with the COMPS more SIMILAR to
the SUBJECT given more weight and the others less
- a GOOD AGENT stays up on the COMP DATA and will DO all of
this for you
- COMP DATA is found in PUBLIC RECORDS and the MLS SERVICE
- PUBLIC RECORDS
- dispite name, DIFFICULT for the PUBLIC to ACCESS
- REALTORS usually get it through TITLE companies
- DATA is usually 3 MONTHS OLD at least
- MULTIPLE LISTING SERVICE (MLS)
- current listings now available to the public
- see realtor.com and MSN HomeAdvisor among others
- your AGENT has recent HISTORICAL and PENDING SALE MLS
DATA which the PUBLIC does NOT HAVE. He will
probably use that
- CONDITION of the PROPERTY
- COMPARED to the GENERAL NEIGHBORHOOD
- ABOVE AVERAGE, AVERAGE or BELOW AVERAGE
- STRUCTURE is the MOST IMPORTANT
- FOUNDATION, ROOF, WALLS, CEILINGS, FLOORS, DOORS and
WINDOWS
- THEN...
- PAINT, CARPETS and FLOOR COVERINGS
- PAY SPECIAL ATTENTION to ...
- BATHROOMS, BEDROOMS, PLUMBING, ELECTRICAL
- FIXTURES, DOORKNOBS, DRAWER HANDLES
- FRONT AND BACK YARDS
- you WON'T be able to INSPECT the COMPS
- often your AGENT will have SEEN the COMPS though
- IMPROVEMENTS made by SELLER
- IGNORE COSMETIC STUFF
- DO CONSIDER MAJOR STUFF like...
- ROOM ADDITIONS, especially BEDROOMS and BATHROOMS
- expensive FLOOR TILE
- remember, a POOL RARELY INCREASES PROPERTY VALUE
- consider it only for YOUR OWN ENJOYMENT
- MARKET CONDITIONS:
- HOT MARKET ("SELLER'S MARKET")
- properties can SELL WITHIN DAYS
- MULTIPLE OFFERS are COMMON
- sometimes SELL ABOVE ASKING PRICE
- you can MISS a home you want by OFFERING just a FEW GRAND
TOO LITTLE
- SLOW MARKET ("BUYER'S MARKET")
- listed properties often LANGUISH for some time
- LOWER OFFERS more often fetch a COUNTER-OFFER from SELLER
- property VALUES can FALL (as they did in the early 1990's)
- MOST COMMON is a "STEADY MARKET")
- NO REAL RULES APPLY on what you should do
- FITS AND STARTS - a listed property could LANGUISH for a
while, then receive MULTIPLE OFFERS all at once
- MOTIVATED SELLERS
- usually ONLY REDUCES PRICE a LITTLE
- usually TWO KINDS of MOTIVATED SELLERS:
- 1: already BOUGHT NEW PLACE (making TWO MORTGAGE PAYMENTS)
- 2: RELOCATED OUT OF AREA (wants to END MORTGAGE PAYMENTS ASAP)
- sale due to DIVORCE usually does NOT reduce PRICE
- ads often mention DIVORCE just to make the PHONE RING
- TRULY DISTRESSED SELLERS:
- occasionally BARGAINS can be FOUND
- usually takes an AGENT to KNOW these places
- an HONEST AGENT on your side is valuable here
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