| In buying or selling a property, there are some guidelines that can be helpful in determining a price. |
What are the comparatives? While similar or nearby homes have a bearing on the price they are not always the definitive or decisive reason. That said, getting comps sets the pricing bar as far as determining the fair market value. Keep in mind, and appraiser sent by the bank will do a more detailed comparison to deliver to the bank what price the property should be worth.
Recent sales are the key. Going too far back and you might be viewing a different market. If you do get into contract, these may be the same comparables which will be considered by the appraiser, so looking at them before making an offer can:
How much can you comfortably afford? This is much more critical for buyers than for sellers. Prior to finding the house of your dreams, talk to a mortgage broker to see what you can qualify for. Keep in mind also that the mortgage market is competitive, and rates can fluctuate. Some lenders will have underwriting restrictions that need to be considered. Bottom line is that your payment should be something you can live with.
How many others are bidding on the property? This is another step at which it’s critical to check in with your agent. You need to know what level of competition you’ll face. Buyers should be aware of the competition that could exist for properties. Even in today’s market there are properties that will command multiple offers. I can help you properly value a property, and keep your offer in front of a seller.
How badly does the seller need to sell? Buyers: Has the property you’re interested in dropped in value? How long has it been available on the market. Sometimes a listing or a listing agent will indicate that the seller is highly motivated. That is usually a sign that bargaining room is available.
How badly do you want to buy, or sell, the place? This is all about you – what is your level of motivation? It doesn't make sense to offer more than the list price just because you have become emotionally involved with it, unless you have more cash than you know what to do with. But within the range of the fair market value, it may make sense to move higher within that range if you are highly motivated to get that particular property.
Sellers: think of your list price as the most powerful marketing tool at your disposal. if you really want or need to sell, get aggressive about setting your price as low as makes sense for your your home's value and local market dynamics to attract qualified buyers and help your home stand out against all the competition