Initial Offering Price For A Home
A little market research can go along way before submitting
an offer. If you do some home work up front it will give a lot better idea of
what your initial offer should be.
If a seller prices a home for a certain amount, most buyers
will tend to instantly go in with their initial offer below the listing price.
The great deals will normally have multiple bids though and you can miss out if
you don't do your research.
First off you need to figure out what the market value is.
Get in touch with the seller or listing agent and check on the activity. If
there are no offers or not to many showings then you can negotiate. If there
are offers already or if they are anticipating some you may have to go in at
list price or above. You may want to think about using an escalation clause.
The trick is to get the seller to sign off on an offer as
soon as possible and lock out the rest of the potential buyers. If a home is
priced well, its not unusual even in this market to be on for only about a
week. If a homes comes up that looks like a good deal it probably is. Try to go
look at it the first day and be able to put in an offer within the first 2 days
on the market. Most buyers can't act that quick and it will give you an
advantage.
For a home that seems to be priced at about market price.
Try to find out when it was first listed. Agents will sometimes drop the price
after about the 30Th day. Say the home has been on for 29 days with no price
change. You can either wait for a price drop or put in an offer of about 10%
below asking price.
For an overprice home your best strategy is to try to
convince the sellers that its over priced. Be prepared to sit down and show
them your comps. Most of the time sellers think their home is better than
everyone else. It will be up to you to show them you have done your research
and you are ready to give them market value for their home.
The idea of this is to let buyers no that you should do your
homework before submitting an offer. Try to establish fair market value. It
will either be below, at, or above. There are different strategies for each one
of them and each one should be played a bit different.
I've purchased my best deals at list price or above list
price. I never purchased a home for under listing price but I've always
purchased a home way under market value.
