Buyers misconceptions about price and how to determine the correct price when making an offer. Yes this is a sellers market with larger than normal amounts of inventory but is a 'stupid sellers market'? Is it a 'sellers fire sale'? Did anyone tell you that this market was a 'sellers give-away and lost his mind sale'? If a seller has their home on the market they indeed want to sell it so not every home is overpriced.
In our area now there are currently 2 levels of pricing, did you know that? Distressed prices and what we call 'arms length transactions'. A good realtor will help you decide what is overpriced and what is not by showing you comparable sales in your interested area.
Enjoy this post's advice from Colleen McConnell from Tallahassee. Let me know if I can help you buy or sell a home!
Misconception:
If you pay list price, you're paying too much.
If you don't know what the current market value is for homes in the area and whether the market is appreciating or depreciating, you don't know what a fair price is and you're likely to miss out on a great deal by trying to low ball a house that's already priced well.
If the house meets your goals, is within your budget, and is priced competitively, it's a bargain and you should make a strong offer. Get assistance from a professional to help you recognize a good deal and grab it before it's gone.
Misconception: Foreclosures and short sales are the best buys.
Many buyers find out the hard way that foreclosures and short sales are full of headaches, may need extensive repairs, require great patience over an extended period, often don't have the criteria that's most important to you, and may never close.
Short sales abound in Tallahassee and many people are starting to avoid them because the pain isn't worth the gain. Foreclosures can be less troublesome, but often in poor condition with challenges that may take longer than normal to resolve. Market prices have corrected in many places, including Tallahassee, and it's possible to find great deals in homes that are priced like short sales, but don't have the headaches.
Misconception You get a better price if you buy directly from the owner.
Bargain hunters sometimes avoid Realtors, thinking that they will get a better price if they buy directly from a FSBO. Meanwhile, the sellers are also trying to save on the commission, so they're not getting expert advice either and often price their homes above market value.
The end result is often that a buyer pays too much or the FSBO is unable to get the house sold. A savvy Realtor working on the buyer's behalf, armed with market data and great negotiation skills, is much more likely to get a great deal than buyers can by negotiating for themselves.
If you're buying a house, it's a great idea to find a good Realtor and listen to their advice.
Lyn, I hope all my buyers read this post or one like it. Three of my short sale took 9 months (each) last year and they were all with different banks. The deals are painfully long and the priced right properties don't come down much (nor should they). Great info to open a few eyes thanks.
Steve: Yes there are challenges outside of pricing alone which you've just mentioned. Once you get that 'deal' you might have to wait 9 months or more. Most buyers aren't equipt with that much patience.
I agree, also especially when buyers think that they can get a super deal in a different real estate market that they can try to lower $ 60,000 in a $ 350K home, that's ridiculous especially here in this market in Colorado :)
Ray: It seems to be subjective for everyone. 'Deal' to one person might mean 'value' ect. Is that 20K off? 30K off list? I think everyone is interpreting that word differently. The media is also promoting all kinds of nonsense that is just not real life.