Every home buyer tries to figure out what it will take to buy the home that they have decided to make an offer on. Determining the right price, or how much wiggle room there is, is the bottom line here for everyone from the first time buyer to the savvy investor.
If you are sitting at your kitchen table pondering this question, then it is time to consider some subtle nuances that I feel are essential for success. At least in the Northern Virginia real estate market where most sales aren’t foreclosures, having a “global view” will give you a greater opportunity to succeed in your negotiation.
Not every offer gets the house
Doing some homework on the house you want to buy is essential, and it is important you do these things quickly and methodically to help you form a unique negotiating strategy. There are many X-Factors in real estate, so, the more you know about each home you are interested in the better. Some facts a clear, but sometimes you will need to infer or form an opinion of what the seller is hoping to achieve.
Some subtle real estate X-Factors:
- How does the house compare to the competition?
- How long has the home been on the market?
- How long have the sellers owned the home?
- Are there any offers already on the table?
- When do they prefer to move?
- Did you meet the seller?
- Why are they moving?
- Is the house occupied or vacant?
- What is the overall condition of the house?
- Is it owner-occupied or are tenants living there?
- Have they already adjusted the listing or asking price?
Wait, but the comps say this home is worth…
There are always facts that people use to determine values, but facts in real estate sales are only so useful. For example, a seller knows that the market value of her home is $300,000 but prices it at $285,000 looking for a fast offer. It is a nice home with an updated kitchen, two year-old hardwood floors and upgrades that will jump out to any home buyer that has been watching the market. I have seen this type of scenario drive statistics focused clients crazy because that new, under-priced listing just did not make sense.
“Isn’t there supposed to be a negotiation, where I make a low offer?”
“Well, not always.”
Unless you are buying a new home from a builder (a whole other scenario), it is essential to remember that most folks have never sold a home before or have experience with one, maybe two real estate sales often spread out over decades. The seller may have raised a family there, bought it before they married, or cared for a deceased spouse there. Emotions often come into play for both sellers and for buyers.
So consider more than the cut and dry facts, the assessment, or the Zestimate. More than recent local home-sales data, school information, walk-scores, or location.
And always know that, even when you put together a perfect offer, another eager home buyer may get the house for an unexplainable reason. And that is the real estate X-Factor.