Don't Overpay for Your Sarasota Home

The market is picking up.

More and more people are determining that the prices have finally hit a point that it makes sense to purchase their first home, or perhaps their retirement place. But as low as the prices have gone, virtually everyone is still bothered by that niggling doubt - am I paying too much for this home?

No one has a crystal ball, and no one can predict if the prices will fall farther or not. So determining if this is the correct time to buy is an entirely different discussion. But for those who want to take advantage of the deals and purchase now, there are some things we can ascertain to make sure we don't overpay given the current market.

Contrary to popular belief, we can't look at list price and just assume the Seller will take $100K less, because it is a down market. Many homes are well priced right now. Many are as low as they can go without taking a loss.

That being said, the list price is nothing more than a guide, to get us to properties which fit our general price range. Yes, we can often look higher than we want to spend, as many places will go lower yet. But the list price is nothing more than a starting point - and shouldn't be considered in stone. There are other factors that greatly influence a fair offer.

1) Comparable sales - A seller can list his home at whatever price he wishes. But the last few similar homes to sell in that neighborhood will provide the benchmark from where we begin. If the last 3 homes sold for $250K, and the Seller is asking $325K for a similar home, the homes value is, well, probably only about $250K. A seller may think his is better, or may be trying to pay off a mortgage - but the fact remains, we do not want to overpay - and if you are getting a mortgage, the home likely will not appraise anyway. If the seller will not or cannot budge, I would recommend looking further.

2) Sellers Situation - Let's say all things are equal - the seller is asking about what everyone else sold their homes for. But the seller inherited the home and owns it free and clear, no mortgage to pay off. That will generate a far different offer than the guy who is selling at a loss, or perhaps just breaking even. A lower offer is more likely to be accepted if its free cash to the Seller.

3) Your Terms - If you write a solid offer, with few contingencies and a quick close, often Sellers will take a lower sales price. A complicated offer has less chance of going all the way through, and is more difficult for everyone, making a low offer unattractive for the Seller. An offer has to be perceived as a win-win, or its not likely to fly. Many buyers say "I don't care about them, I only care about what I get" - but structuring an offer that makes sense for everyone is always the best bet to go through.

Working with a buyer agent gives you the expertise of a qualified professional to assist you in deciding on an offer price. Although the decision of what to offer is always yours, a buyer agent can provide all the background information necessary to make an intelligent offer - one that gets accepted!