Things to Consider When Offering a Low Price
The Pueblo real estate marketplace is hot right now. There are more buyers than homes for sale. In July 48% of all homes sold in Pueblo County did so within 30 days, that’s how quickly good homes are selling. I tell my sellers if the house is priced correctly and in decent shape it will sell quickly and for top dollar. Without getting all statistical and analytical it pretty much stems from the fact that the Pueblo economy is stable, we are seeing families moving to Pueblo and for the past good number of years there has been very little new homes being built.
A few things that should not influence your decision on the final price.
There can be any number of factors that could influence your final price offer and unfortunately there is no one size fits all answer.
How much the existing owner purchased the home for, how long ago, and what they stand to make as a profit on the home. You don’t know the situation, you don’t know how much is owed on the property, you don’t know the financial situation of the seller. The seller could have run into medical issues and took out a 2nd mortgage on the home… that could easily eat up the $30,000 in profit you think the seller may be getting. They could be wanting to sell to downsize because their last child is going off to college and they want to pay up front some of the expenses. It could be a bunch of things. It could be that when the seller purchased the home it needed a lot of renovation or they simply did a lot of renovations or fixing up of the place. Sometimes you might find out why the seller has put their home on the market, but you probably will never know what their true bottom line is.
Sometimes clients think they can low ball their way to a good price. And sometimes sellers get so insulated with low ball offers that they don’t even want to counter your offer. Why? Because their insulted plain and simple. If you know good and well that a home is easily worth $100,000 and you offer a seller $80,000 when there is no indication that the seller isn’t desperate, or the house is ready to go to foreclosure, or some other peril, it simply bruises the sellers ego. After all in most cases that home is still their pride and joy and to offer such a ridiculously low price just really isn’t in the spirit of getting a good deal, they feel more like you’re trying to rob them. Now of course, if you don’t have a problem casting as many lines out in the water as you need to get a good deal, then that’s ok. The only point I’m trying to make here is that the low ball offer though can kill the deal. Let’s just hope it wasn’t a home you would be extremely happy with.
So how should you go about determining a price to offer on the home you’ve decided on?
Well that’s where a real estate professional comes in handy. Really!
As a member of the Pueblo Association of REALTORS® I have access in one place to most of the homes that have ever been on the market, what they sold for, how long they were on the market and how much the seller gave up in concessions, to name just a few data points. Ultimately we can run the numbers and based on experience I can give you a range of prices in which to consider and also negotiating strategies to go along with the offer to maximize your savings to get the best possible deal for you. Other factors will obviously enter into the equation. How long a home has been on the market, the price range, the neighborhood values, etc. We will also look into factors that affect any loan you may be getting to purchase the property, I can show you similar homes that have sold and what the range of prices were, etc. My goal is to inform you as best I can as to the true market value of the home.
In the end, you’re the boss, I will never tell you what price you should offer. Based on your decision I will work my best to get you the home you want at the best possible price without running the risk of losing the deal to an upset seller, or even to another buyer.
Tagged: Home Buying