How will you know if the Home is a "great deal"?
I often have home buyers looking for a 'great deal'. My Zillow client reviews show 5 stars for Negotiation, and at our very first meeting I am often told, we want a Realtor who will get us the "best deal" So the question that begs to be asked is - What is a good deal? and how will you know when you get the Best Deal?
Price of home - is determined by external Market conditions, essentially supply and demand. The negotiating difference in a typical real estate transaction is about 2-3%. The assumption being, the seller would prefer to drop the price to attract other buyers, before they will agree to a home buyer's aggressive low ball offer. What is Market value?
Multiple bids - The whole point of a successful negotiation is, to GET the dream house after all is said and done. Aggressive lowball offers are often rejected - so are they really helping? Idea is to try for a win win, understand the market, compare recent sales and offer a price that will get accepted or encourage a reasonable counter offer, eventually leading to the sale.
Speculation - You want a home that will retain its value, and hopefully even appreciate in the long run, but something you love, that meets your family's needs. It is more of an investment in lifestyle and family, rather than just a financial investment. If you want to speculate - the stock market may be a better option.
So I urge my buyers to switch focus slightly.
What then is a good deal?
- Is a low price the best indication of a great deal?
- Is it still a good deal if that home is in poor condition, or at a compromised location?
- Could snagging the best home in a desirable community with low turnover, be a great deal?
- Is winning a multiple bid, snatching it away from other buyers....a great deal?
- Buying a well-maintained, move-in-ready home that needs no updating would be a great deal for a busy family right?
- Being able to negotiate at Inspections, when you were unable to budge the Purchase Price due to competition, is awesome!
- Buying now, instead of throwing away money on rent for another year - that's incredible savings right?
- Locking in low interest rate over the life of your loan is an incredible saving right?
- House hunting for years, willing to wait until you get your perfect home is fair enough. But the kids do needs that space or school district now - that would be a great deal right?
All just a matter of perspective. I bring these up in my conversations with home buyers all the time.
The idea is to find the best home within your criteria, at the right time, at the best possible price!
Some more info and food for thought before you start house hunting click here.