As a buyer looking for a home, there are many ways to find your new house. Your Real Estate Agent, a friend, the internet, and yes some people still drive around looking for “For Sale” signs in the yard. Finding a home is an exciting and sometimes stressful process. There are many emotions and decisions to be made.
In my opinion, especially lately, the stress comes when it comes time to make an offer on a home. What is in an offer? The price, deadlines, included & excluded items to negotiate, closing costs, etc. Asking for the fridge or the washer and dryer isn’t that stressful. Asking for a home warranty isn’t that hard. Negotiating when to do home inspections and close on the home isn’t bad. However, the price of the home is most stressful lately for my buyers. Why?
This is a buyer’s market, which means there are more home on the market than buyers. So buyers have more choice and usually flexibility in price negotiations. Have you ever been to Tijuana, Mexico? It is a fun place to go and buy random things from pottery to sombreros. One of the fun things about the city is your ability to barter with the seller. You ask, “What is the price of those “real” Oakley sunglasses?” All along you know they aren’t real brand sunglasses, but fake ones. You still want them regardless. The seller says “$20″. Then the negotiation begins, you say 5$, he says $15, you say $7, he says $12 and so on until you reach an agreed price.
Sometimes, making on offer on a home doesn’t work this way, even though some feel the need to barter. This is why I say the listing price of the home doesn’t matter. We shouldn’t use the list price as a starting point to negotiate. Why not? That price could have been totally made up by the seller. The listing agent has done some research on homes that have sold recently in the area, but the list price is not science.
Instead of focusing on what the home is listed for, we use data. As your agent, I am able to see every home actively listed, under contract, and sold. We generally only go back 90 days on a sold price within the neighborhood or surrounding areas of the focus property. This is the only way to see if you are “getting a deal” or paying too much. Just because the home is listed at $250,000 and you buy it at $240,000 doesn’t mean you “got a deal”. If a home is listed at $400,000 and you pay $399,999, that doesn’t mean you paid too much. The market data will support the price.
To summarize, the true value of a property is what a buyer is willing to pay for it and what a seller is willing to sell it for. The market will supply the data necessary for you to determine what you could pay for the home. However, as the buyer, you are always in the driver’s seat. Just remember though, if you were a seller and someone came and asked you to give them $30,000 out of your pocket, how would that make you feel?
Dallas Jensen
Associate Broker
The Jensen Group Real Estate-Utah
801-706-2481
