In this market you can find great deals when it comes to buying a home. If you are equipped with some knowledge and know how you will have the upper hand when it comes to negotiating.
The seller priced the home at $200,000, many buyers will instantly come up with their offer price without doing any research. Look at comps in the area. You need to figure out if the home is below, above, or at market price.
First off you need to figure out what the market value is. Get in touch with the seller or listing agent and check on the activity. If there are no offers or not to many showings then you can negotiate. If there are offers already or if they are anticipating some you may have to go in at list price or above. You may want to think about using an escalation clause.
If you can get the seller to sign off on your offer within the time period then you will have the home locked in and block out the other buyers. Most homes that are price below market in the Seattle market only stay on the market for about a week. If you can put in an offer within the first 48 hours you will have a huge advantage. If you wait much longer you will most likely be bidding with another buyer.
If the home is at market price you will want to see how long it has been on the market for. Generally agents like to drop the price every 30 – 45 days. If the home has been on the market for 29 days with no price change then it would be safe to say you can go in at about 10% to 15% under asking price. If the homes price dropped within the last week you may have to go in a bit stronger at around 5% under asking. Again it’s always good to call the listing agent before hand to check on the activity.
If the home appears to be overpriced then you should show the sellers your comps. There are still a lot of sellers that still see their home priced back what it was a few years ago. If you can’t persuade the sellers to come down to market price or below you will want to track the home. If a seller has to sell the home then they will eventually drop the price of the home. In many cases it will sell for less than what they could have got if they weren’t so stubborn.
If you find the home is overpriced then you will be forced to throw in a low ball offer. Nobody like a low ball offer but you can increase your chance of getting the home by showing the sellers where you got your price from. Hopefully they will listen to you. If not, just track the home until the home price drops down to where you need it to be. A lot of times if you watch it you can get a better deal on price drop than if the sellers would of accepted it in the first place.
I’ve purchased my best deals at list price or above list price. I never purchased a home for under listing price but I’ve always purchased a home way under market value.
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