How Much Should I Offer?
This is a commonly asked question from many of our clients, “How much under the listing price should we offer?” This is an excellent question and the answer is a difficult one. The main reason we emphasize the education phase of looking at homes is because that is the best way for you to know value. When you review and study 40 or more listings, then drive by 10-20 and look at 5-10, you will recognize the “Hot Listings.” You’ll also recognize the “lemons.” You will find that generally Sellers price their homes differently for 4 basic reasons:
1. Ridiculously Overpriced!
These sellers have listened to a real estate agent over-inflate the value of their home in an effort to obtain a listing. There is a natural tendency on the part of sellers to list with the real estate agent who gives them the highest promise. Therefore there is a tendency by some real estate agents to give the seller a high “value” in an effort to obtain the listing. These homes can be as much as 10-20% overpriced. This type of sellers may need a strong dose of reality for a few months before they begin to realize that their home is way overpriced as compared to others in the area. The longer an overpriced home is for sale, the more likely we can get the seller to face facts and sell at a fair price.
2. A Little Overpriced!
These sellers fall into 2 categories:
- Those that feel their home is worth every penny of their asking price.
- Those that want to leave a little “negotiating” room.
These homes can be 4-10% overpriced. Perhaps 75% of all homes for sale are priced in this range.
3. Priced At Fair Market Value
These sellers have carefully and realistically studied other homes for sale. They have priced their homes very competitively. These homes usually sell within 4 weeks at or very near the listed price.
4. Priced Below Fair Market Value
These homes are priced below value. Perhaps the seller wants a fast sale or the real estate agent recommended too low of a price. These homes usually sell within 7-10 days, at or above the listed price. There are usually competing offers.
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