When you’re buying anything — and that includes a house — you want to be as informed as possible.
One of the most important factors in the purchase of a home is determining what makes a fair asking price and, by extension, a fair offer — one that is more likely to be accepted.
How do sellers arrive at an asking price?
First, it’s helpful to know that there are two primary considerations most homeowners use to determine the asking price for a property — and they’re both about motivation.
The first motivation is to sell the house quickly. Sellers in this situation may be more aggressive in their pricing strategy — and that could mean good things for you. It may also mean a multiple-offer situation, so be prepared to act.
Some sellers don’t need to sell in any particular time frame. Their main motivation is to maximize profit on the property. In many cases, the home may be owned outright or be a second home. This can mean the seller is looking for a certain price and will likely be less flexible.
In most cases, though, there’s a happy medium between the two extremes — and that’s where most homeowners end up.
So how do you know if an asking price falls is reasonable?
Do your research
As I mentioned at the outset, it’s important to be an informed consumer. The best way to get informed is to do your research. The Real Estate Center at Texas A&M University (www.recenter.tamu.edu) is a good place to start. The center offers sales data from around the state, which enables you to learn about the local market.
You should look for things like how quickly homes have been selling in a neighborhood and the surrounding areas.
Aside from the seller’s motivation, which you will likely not know, think about what factors may go into pricing a home — renovations that have been done, the general condition of the home, school district, location, and more.
Get help from an expert
Buying a home can be an intimidating, confusing and lengthy process, and I strongly urge you to use an expert to guide you through the transaction.
Texas Realtors are certainly industry experts, but more than that, we’re local experts who know what’s going on in a particular neck of the woods. Real estate market conditions can greatly vary within a city, so it’s this local expertise that really offers value to you.
From the specific to the general
You may only buy a few homes in your entire life, but most Texas Realtors conduct several transactions per year — often in the same area. This frequency not only enables us to spot local trends in pricing and market conditions, it also affords a familiarity with the process so there are no stones left unturned, no documents left unsigned, and fewer chances for the transaction to fail.