If you’re like most home buyers you have two primary goals when you start looking for a home. First you want to find the perfect home that meets all your needs and desires, and secondly, you want to purchase this home for the lowest possible price. When you analyze buyers that are successful in purchasing the perfect home for thousands below asking price, some common denominators emerge. Although your agents negotiating skills are very important, there are some other key factors that come into play long before your offer is presented.
TIP: When considering an agent to represent you, Ask the agent what their average List Price to Sales Price % is when helping buyers, compared to the market average,…this will give you an idea of their success in helping buyers save $.
These Steps Will Help You Save Thousands When You Buy a Home
Make sure you know what you want……As simple as it sounds many home buyers do not have a clear idea in their minds before they go out searching. When you go out shopping there are two homes competing for your attention: the one that meets your needs, and the one that fulfills your desires……Obviously, your goal is to find one that does both. But this situation isn’t always possible depending on your price range and the market.
When you’re looking at homes keep in mind the things that are most important to you and your family. Is the number of Bedrooms important, the huge yard for your kids to play, maybe it is the great room right off the kitchen or the private office. It is always best to prioritize your needs and keep them in mind.
Find out if your agent offers a “Buyer Profile System” or a “VIP Home Hunting Service” which takes the guesswork out of finding just the right home that exactly matches your needs. This type of program matches your exact criteria with all of the homes currently on the market and will supply you with current, by the hour-updated information on an ongoing basis. A program like this helps you look at homes that fulfill your needs and desires streamlining the process and finding that perfect home.
How Sellers Set Their Asking Price
For you to understand how much to offer on your home purchase you need to understand how Sellers set their prices. Here are 4 methods you will begin to recognize as you start to view homes.
- Clearly Overpriced
Every seller wants to get the most amount of money for his or her home. Real Estate agents know this and if more then one agent is competing for the listing, an easy way for them to win the battle is to overinflate the value of the home. This is done far too often with many homes overpriced 10%-20% over their true market value.This is clearly not in their best interest, in most cases the market is not fooled, and the home will linger on the market with some negative side effects.
- This home will be labeled by other agents and will be a target for aggressive offers way below real market value.
- The sellers are inconvenienced with constantly having to have their home ready and in “showing” condition…..for nothing. These homes usually end up expiring forcing the seller to go though the listing process again. This history follows the home and hurts its market position even when the price is dropped to real market value. This is the cause for the eventual weak sale price ending up lower then market value.
- Somewhat Overpriced.
Approximately 75% of the homes on the market are overpriced by about 5-10%. These homes will also sit on the market longer then necessary. There is usually 1-2 factors involved here: Either the seller really believes their home is worth much more even though the market research suggests other wise (after all, there is a lot of emotion caught up in this issue), OR they have the strategy that they need room for negotiation to get the price they want. Either way these strategies will cost them time on the market and the ultimate price they receive.
- Priced at Market Value. (Correctly)
These sellers understand that Real Estate is part of the supply and demand system and will carefully and realistically price their homes based on a thorough analysis of market statistics and comparison to other homes on the market. These competitively priced homes usually sell within a reasonable amount of time and very close to their asking price.
- Priced Below the Fair Market Value.
Some sellers are motivated by a quick sale. These homes attract multiple offers and sell fast, usually within a few days. These homes will sell at asking price and in some cases well above the asking price.
A great Buyers Agent will understand the information in this report and will arm you with a strategy to find the perfect home while positioning you to save THOUSANDS of dollars on it’s purchase!