For some reason, when it comes to the two biggest ticketed items that most of us will ever buy, namely cars and houses, we seem to become almost paranoid about the possibility of being ripped off. Which is no doubt the reason that both of these items may be endlessly haggled over and thrashed out before finally reaching an agreed purchase price.
When it comes to homes, it is decidedly a buyer’s market and has been for quite some time. Your best move is to check out recently sold properties that are comparable to the one you are considering and make your offer from there. Your real estate agent can be of invaluable assistance when it comes to helping make these calculations.
You may also want to check out comparable properties that were on the market recently but failed to sell. See if you can determine why this was the case. Was the asking price just too high? Did the properties have enough issues with them to effectively negate the asking price? There are any number of factors that may result in a property becoming overpriced.
Check out market conditions and appreciation rates in the area where you are looking. Have home values been on the rise? The decline? Since it is a buyer’s market, you can expect values to be extremely competitive. When the pendulum swings back the other way, you can look for homes to become overpriced…..two extremes, with reality conveniently ensconced somewhere in the middle.
Consider looking into homes advertised as “For Sale By Owner”, which can effectively eliminate the 6% agent commission. 6% doesn’t sound like a lot, but it can drastically reduce the price of a home.
Unfortunately, many of these homes may start out incredibly overpriced, so the 6% off may become a moot point. Still, there are deals to be found in this area, with a little due diligence and patience, perhaps you can find one.
Of course the single best source for helping to determine if the price you are considering is fair or not is your real estate agent. They are familiar with the homes and neighborhoods in your area and can guide you to the best priced properties. Let them do the footwork where it is appropriate. You’re paying them a considerable sum of money to do so.
In any scenario, the ultimate bottom line is your own gut instinct. Does the price of the property ring true and fair to you? If not, then keep looking. In most cases, we are willing to pay a little more for properties that we are genuinely excited about. This is the single most important purchase you will make, at least for the next several years, so make sure it is one that speaks to your heart.
Even when the tide turns and it becomes a seller’s market again, don’t just assume that the price on the ad is what you must pay. Always offer slightly less and see what happens. You have not because you ask not. You can get an attractive deal even in a seller’s market.
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