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Value
Of An Agent
Common
Errors to Avoid
Home Inspections & Links
House Hunting Worksheet
Know
the Market
Know the Neighborhood
Top 10
Potential Problems
Value Of An Agent
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Common Errors to Avoid
Preparing Your Home
Should
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Best
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Sell
or Buy First
Why Use
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What Do
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20
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Mortgages Explained
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When Buying, Know the Market
The asking prices of most properties that are
for sale reflect present market conditions and
recent sale prices of similar homes in the area.
When homeowners price their homes they try to walk
the fine line between getting the highest price and
ensuring the asking price is competitive enough to
attract serious offers. While most Selling Agents
advise their clients to realistically price their
homes in order to attract acceptable offers within a
reasonable period of time, some properties may not
be properly priced and you should know this before
making an offer.
Before making an offer to purchase a home, you
should ask yourself the following questions:
- What have similar properties sold for in the
immediate area?
- How long were they on the market?
- How does this one compare?
- Is it over-priced, under-priced, or fair
value?
- What type of market is it - is it a
Seller's, Buyer's or a Balanced market?
By having this information at your fingertips you
will be in position to negotiate the best price and
take advantage of any opportunities that may show
up. This is where the experience and knowledge of a
good REALTOR® is invaluable. REALTORS® spend a lot of
time and energy making sure they know their local
market inside and out. They keep their finger on the
pulse of the market and have the resources,
connections and ability to keep you up-to-date with
its constant changes. They know all of the
properties currently for sale in your area and are
literally your best resource for finding the perfect
home.
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The main
factors that affect market value are...
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Location:
- availability of community amenities, such as
public transportation, parks, stores, churches
and schools
- quality and consistency of neighborhood
planning
- future development plans and local zoning
Property:
- style, layout, size, age and quality of
construction of the building
- size, shape, privacy and landscaping of the
yard
Condition of the Home:
- first appearances
- floor layout
- quality and appearance of fixtures
- general overall condition of main systems
(roof, furnace, electrical system, central air,
etc.)
Comparable Properties:
- the asking and selling prices of comparable
neighboring homes
- The best way of establishing a range of
value for a property is to have your REALTOR®
prepare a general
- market analysis of the neighborhood you are
interested in. This will give you a good
overview of the current
- market and will show what comparable
properties have been selling for recently.
Market Conditions and the Economy:
- number of homes currently on the market
- number of people looking to buy
- the state of the local and national economy
- current mortgage rates
No matter the condition or desirability of a
property, its value will be affected by current
market conditions. Here are the various conditions
you may encounter and how they will affect you:
- Balanced Market:
The number of
homes on the market is equal to the number of
buyers (supply equals demand). In this market,
prices are stable and homes sell within a
reasonable period of time. It is a calm
atmosphere with Buyers having a satisfactory
number of homes from which to choose.
- Seller's Market:
The number of
Buyers exceeds the number of homes on the market
(demand greater than supply). In this market
prices are increasing and homes tend to sell
quickly. As a Buyer you will probably have less
negotiating room and may experience competing
offers when trying to purchase your home.
- Buyer's Market:
The supply of
homes exceeds the number of Buyers (supply
greater than demand). In this scenario prices
tend to drop and the properties stay on the
market longer. As a Buyer you will have more
selection and less competition and thus be
better able to negotiate a good deal.
In Summary:
When you understand current
market conditions, you are better able to position
yourself as a Buyer. It helps to know if you are in
a Seller's, Buyer's or balanced market when deciding
what price to offer. In a Seller's market, there is
little selection and you may have to make a
full-price (or even higher) offer if the home is
properly priced in order beat the competition. In a
Buyer's market, you have a lot more selection and
plenty of room to negotiate. In a balanced market
you will find a good selection of homes for sale and
have a reasonable amount of time to decide on a home
and negotiate the price.
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