So, how do you know that what you are offering is even based on
a realistic amount? This a very good question and one that every buyer should be
asking. While there is NOTHING or NO ONE that can guarantee that
today’s good value will be worth any thing tomorrow, you need to get the best
deal you can today based on today’s market conditions.
Here is where to begin…
•
Search for comparable properties (similar sq ft, beds, baths,
garage, age) that have sold in the community of the subject property within the
last 90 days. If there are not at least 3, stretch the search to 180
days.
• Your competent buyer's agent should also give you a comparable market analysis report
which should be very similar to your findings, as well as the current deed on the property, plat map, septic permit (if applicable) and tax record.
THE DO NOT’s…
•
DO NOT- base the value on the tax record or a "zillow estimate". Both are un-reliable
sources in a fluctuating market. Nor do these two tools take into account upgrades, changes in the home or neighborhood or rental properties.
•
DO NOT- base your offer price on what the seller owes or what
you think they owe. However, your buyer's agent should be able to give you an "guestimate" on about how much they owe to help with your negotiations.
•
#1 DO NOT- work with the listing agent or builders agent as they
work FOR THE SELLER. It's in your best interest to choose someone who has your best interests at heart and can completely negotiate on your behalf. The seller typically pays the buyer's agent's commission, so you're getting the benefit of working with a professional, for free!
A necessary tool in the homebuyer's toolbox is the appraisal. The lender is going to require an appraisal and it can be completed during the due diligence period and the buyer should be more than willing to pay for it. The appraiser will determine the value for which the bank will finance, and if the seller refuses to re-negotiate, so that the selling price at least matches the appraisal value, the buyer has the opportunity to back out of the contract, free and clear.
At the end of the day, a home is only worth what a buyer is
willing to pay for it. But, until the last “i” is dotted, purchase with
intelligence. When everyone is well informed and realistic, you will have a smooth transaction with no surprises!
