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How
much can I expect to negotiate the price of
my new home?
What is the Seller's bottom
line?
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How
Much Can I Expect to Negotiate The Price Of
My New Home?
I don't want to overpay for my new home
and look foolish. I don't mind paying a fair
price, but how much should I pay?
This is a very real question we hear all the
time. Buyers need to understand they are not
buying stocks and bonds. It's true they're buying
an investment, and their home will probably
be their largest single investment. Often buyers
get lost in the zeal to prove they are the king
of negotiators! They get blinded to the fact
that this property will be their home for years
to come. They often overlook the fact that a
home is more than a structure. Besides buying
the house, they are buying new neighbors, convenience
to schools, shopping, churches and pride of
ownership!
When a seller is willing to drop his home significantly
below the value of similar properties, he probably
has a good reason to due so! Nice homes don't
sell cheap! Buyers and sellers need to remember
it must be a "win-win" situation for
both parties. They need to get away from the
mindset that it is a "duel to the death"
or some prize to be won at the expense of the
other party.
In today’s volatile market a Buyer’s
Agent may be able to save you thousands of dollars!
Many sellers are forced to discount their homes
substantially to compete with other sellers
who are offering their homes for sale as “a
short sale” to avoid a foreclosure. There
are many bank owned “REO’s”
on the market which are also dramatically impacting
property values. “REO” is Real Estate
Owned by banks due to foreclosures.
Make
sure you pick an agent who is experienced
in short sales and REO’s to give you
a better idea of what sellers absolute bottom
lines may be.
Due
to these reasons and the extremely low fixed
rate loans that are available, we may not
see such a strong home buyer’s market
anytime soon!
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The
sellers that cut their prices generally do so
for one of three reasons. |
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| 1. |
One
is the house is overpriced. The fair price
can be easily determined by having your
"Buyer's Agent" do a "market
analysis" of the home. The "market
analysis" will show you what price(s)
homes have sold for recently in the neighborhood.
In addition it can show you if other homes
are currently on the market. Withdrawn
and expired listings will also give you
an idea of a fair price.
Don't forget when you are looking at listing
information to look at the "DOM"
listed on the information. "DOM"
means "Days On The Market".
When you see that homes only stay on the
market for less than thirty days it tells
you that you are in a very viable market.
Why would the seller want to cut his price
to sell to you when he can hold out for
another week or two to get a fair price
that is evidenced by other sales in his
neighborhood. |
| 2. |
The
second reason sellers cut their price
is there is a problem with the structure
or lot? Do you know what to look for to
spot a horrible soil problem around Richmond,
called shrink-swell soil that can cost
tens of thousands of dollars to repair?
How about mold and mildew that has been
painted over to look like the home has
been well maintained? What about a bad
roof or a deteriorated below ground oil
tank. If you have a leaking subterranean
oil tank, the State of Virginia can require
you to remove it at a cost to you of $6,500!
Oh, I forgot, the $6,500 includes removing
the contaminated soil by one of a very
few registered contractors who is licensed
to do the decontamination job! |
| 3. |
The
third reason is the seller needs to liquidate
the house quickly. This is often indicative
that the property has not been maintained
well in the past because the seller simply
didn't invest enough into the house to
maintain it properly.
It's no doubt that sometimes you can get
a good deal just by being in the right
place at the right time. Hey, we can all
hope! |
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