Now that you’ve found your perfect Centennial CO home, how do you decide how much to offer? You can’t just use a formula to determine what to offer. You need your agent to do some research and homework for you.
Your agent needs to do some research and homework for you because that answer is not simple. What I tell my clients is that you never know what criteria a seller used to price his/her home.
Take the example of a home which appraises at $300,000.00.
Say there are 3 owners who have the identical floor plan, similar upgrades, features and location. Their homes are appraised at $300,000. But their situations are different.
Owner #1 is very motivated because the husband has been transferred back to the east coast and has already moved there leaving his wife and 3 kids behind. They price their home at $280,000 because they are very motivated to sell quickly.
Owner #2 didn’t have any money to put as a down payment when they purchased the home a year ago so they financed everything. They owe $305,000 (even though it’s only worth $300,000) against the home plus they have to pay the realtor to sell the home. So they list at $315,000 insisting that they have to get that amount out of the home.
Owner #3 have lived there for 15 years and have a nice little profit, but now they want to move to Arizona to a retirement community after they sell this home. They are realistic but not greedy and in no hurry. They list for $300,000.
Currently the ratio of sold to asking price in the general Denver metro area is 97%.
If you take the 97% average price differential and apply it to Owner #2, you will be overpaying. If you apply that differential to owner #1, you run the chance of losing a good buy and someone beating you out with a better offer.
So what I suggest is that when my clients find the home that they like and want to make an offer on, that we do our homework.
Our homework consists of:
1) Looking at the loan & deed history of the subject property.
2) Performing a CMA (Competitive Market Analysis) on the property to see what other similar homes in similar location with similar sq. footage, features & upgrades have SOLD for in the recent past. That tells us what a ready, willing and able buyer has been willing to pay for similar homes.
3) Talk with the listing agent to find out as much as possible about the seller’s situation.
4) Determine what the home is worth to YOU.
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Ask me about my secret clause, that is perfect to pull out of my bag of tricks, for the situation where you absolutely have to have the home, but you don’t want to overpay.
If you need a private consultation on your particular real estate situation, call or text me (Vickie Hall) at 303-944-1153 or email me at Vickie@DreamsCanHappen.com.