- Personal Finance
Tips For Getting A Good Price On A Home
Tips For Getting A Good Price On A Home
Getting a fair price on a home is not so simple. Weather you are a
seller or a buyer, basic purpose will be to get a fair price. Here, the
important thing is that, how can one evaluate a home price? How to determine
the fair price for a home? Read the following tips you will surely get the
answers for all related question that arise in your mind regarding getting a
fair price on a home.
- Research Comparable Properties
In this step you go by yourself and actually
visit the comparable properties. You look upon their sizes, condition, location
etc. after that you compare the prices of these properties with the one which
are you are thinking to buy. In this way you will get some idea of fair price
for a home which you are intending to buy.
House that Didn't Sell
if the price of a home that you are considering to buy is similar to the other comparable homes, and those homes are not sold, this shows that the property that you are thinking to buy is overpriced. And on the other side, if there are so many comparable properties in the market and they are vacant, then prices will be low. You can check out the unsold inventory index and get all the information about recent demand and supply in the housing market. This index try to assess how much time it will take for all the homes that are currently on the market to be sold and also provide the rate at which homes are presently selling.
Conditions are crucial.
This is a great tip, you need to assess the market conditions and the prevailing appreciation rate in the market to assess a fair price for a home. Usually when you look from a seller's market, properties will maybe be a bit overpriced, and on the other side if you look from a buyer's market, properties are appropriate to be low priced. But you must know that, it all depends on where the market currently stands on the real estate (boom and bust) curve. It may happen that, even in a seller's market, properties might not be high priced, if the market is no moving towards its peak. In opposition, properties may be overpriced yet in a buyer's market if price just started waning. It is indeed very difficult to guess when market will be at its peak and when starts declining, but if you know the history of the market then you can make more accurate guess of market fluctuation. You can not ignore the unemployment and mortgage interest rate effect on the market and overall economy.
For sale by owner (FSBO) as name suggests, it a property which is being sold directly by the owner and no selling agent is involved in it. We are mentioning this as a tip, because buyer need to know, weather it’s a FSBO or 6% average commission of selling agent is also included in the price. FSBO property should be at discounted rate because no agent is involved in this deal and buyer must know that. One important issue that arises in FSBO is that, sometimes it happened that, Owner neither exactly know the market price of comparable property nor he gets any advice from real estate agent. In such case property may be overpriced by the owner.
- Expected Appreciation
Expected future appreciation of the area is
something that has direct relation with the property prices. There are so many
things that can guide you and gave you a hint about the future appreciation of
the area. For example, if you see new development plans, new road, and railway,
improvement in basic infrastructure, universities, and hospitals and big
companies moving to your area, all this indicates that future appreciation of
your area will be very good, and value of you home will be increased in the
coming year. You should buy property as early as possible because, price of
property in such area will rapidly increase within no time. But on the other side,
if you see shopping malls are closing down, no new development plan are being
made, there is no peace in that area etc. These signs show that future
appreciation of your area is bad, and you should avoid moving to such area,
though prices will be very low, but that would not be a wise decision.
Estate Agent's Opinion.
Even if you have little bit experience in real estate buying and selling, but you must consult with your real estate agent, because, experts are experts. You must take the real estate agent s opinion, because they have an idea that, what would be fair price for a specific home.
the Price Feel Fair to You?
This has great importance. The price will seem fair to you only if you will be satisfied and like the property. If you are not happy and don’t like the property, what ever would be price, that would be unacceptable to you. You can pay even more for a property you liked and satisfied with.
Sometimes sellers deliberately overpriced their property to generate higher profit, to increase the value of their property, but they have negotiable price. On the other side some sellers already low priced their property, because they don’t want to negotiate and they want to invite more bidders. So as a buyer you should ask a price which is below fair price to just checking the intentions of the seller that what’s actually in his mind. If once you come to know this, you will be more close to get a fair price. This is known as testing the water.
When the contract is done, the lender will perform an appraisal of the property and the main purpose is to guard its financial interests. Note that if the appraisal comes at significantly less price that you offered, then there is a chance that you are not receiving fair deal. When you are in contract, home inspection is made; this inspection will give you a clear picture of the home. You will come to know about the repairmen needed at home, if you see big repairmen cost then you can either demand discount in the home price or you can ask the owner to repair it himself.
on Recently Sold, Comparable Properties
This is a very easy and simple step. You are required to know the sold prices of comparable property in your neighborhood.. Comparable property mean the area of both properties should be same, location and condition should be same. if you know the prices of recently sold comparable property in your neighborhood; you will get some rough idea of the prices prevailing in the market. To know about the prices of recently sold comparable property you can get help from real estate agent as well.
Whenever you are going for the purchase of a
home, you should be aware of, how homes are priced. How a fair price is
determine. If you know this, you will be able to make successful investment