What Buyers Need To Know Posted by michael.luzzi Jun 30, 2008 @ 5:04 pm
In today's market, there are no "cut and dry" formulas for determining a selling price or what a property should sell for. Many variables do come into play.
First and foremost, the main determining factor are comparables, also know as "comps". These are properties that are similar that have sold in the past ninety days (preferably). Appraisers can go back up to six months to find sold properties, as was the norm before. They are now trying to stay within that ninety day period due the the continuous slide in the market.
The next factor would be how motivated a seller is to sell. If a seller bought a property between 2005 - 2006, chances are they overpaid then according to market values today. They most likely are "upside down", which is not a good situation to be in. They cannot expect a buyer to "bail them out" of a bad situation. Most times their flexibility is limited, due to the fact that they would have to go to closing with a check! Also not a good thing.
There are plenty of very motivated sellers out there. The key is, as a buyer, is to be pre approved by a lender, if financing, and be ready to move forward on a good deal. There are many times, in the market place, that a buyer is willing to buy, but has to sell their home to move forward. This is the last kind of situation a seller wants to get involved in. It becomes a "domino effect" for the worse.
A buyer that shows interest in a property, is pre approved, has nothing to sell to move forward and is putting down 20% or more, commands more attention from a seller and usually can negotiate a very good deal. The reason being is that the seller knows that it's a "done deal"They also realize that it's a buyer's market and that particular buyer has many other options to choose from.