Home Buying in Staunton>Question Details

Najala, Home Buyer in Staunton, VA

My daughter wants to buy a house in Staunton, VA and listing prices are all over the map. Comparables are

Asked by Najala, Staunton, VA Mon Jun 1, 2009

hard to come by. Since market value is what a buyer is willing to pay, how can that be determined when the price per square foot varies from $72 to $155?

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The price per square foot has almost nothing to do with a property's value. It's not going to reflect such things as age, lot size, condition, improvement, or location. Here's a blog I wrote on the subject: http://www.trulia.com/blog/don_tepper/2010/07/price_per_squa…

Yes, it can be a challenge if comps are difficulty to come by. You (and your Realtor) have to do the best you can. Find the best comps, then adjust them based on the difference between them and the property you're interested in.

I'd also bet that if you actually took a look at some of those houses, you'd easily see why there's such a wide variation in price per square foot. (Age, lot size, condition, improvement, location, etc.)

Hope that helps.
0 votes Thank Flag Link Wed May 9, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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LISTING PRICE
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.

Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
0 votes Thank Flag Link Wed May 9, 2012
You're right. Comps can be a challenge. I would suggest using comps from the nearest community and make adjustments accordingly, based on the differences in economic status of each market.
0 votes Thank Flag Link Wed May 9, 2012
This area hasn't come back to reality with prices yet in general. You'll occasionally find something priced right, but it's the exception rather than the norm for sure. Notice how long most are staying on the market, how much buying costs relative to renting, avg pricing compared to avg income, etc. In my opinion, the only way these prices in general will be supported any time soon is if there's an inrush of (uninformed) buyers into this market using FHA loans in conjunction with the current tax credit to buy houses they can barely (or not) afford with essentially no skin in the game (read as 3.5% down, which is covered by the tax credit).
0 votes Thank Flag Link Thu Dec 17, 2009
The price per square foot is determined by the quality of the house and by the amenities and upgrades in the house. On New Construction it is the same . It is determined by what the total cost to the builder. Also , the price of building a house today is more than it was last year , 10 years ago , 20 years agoe, etc....You will pay less for an existing home than you will New Construction, but at the same time, once you do a home inspection it make cost you less to pay more in the long run.
Web Reference: http://www.SUSAN-NEWTON.com
0 votes Thank Flag Link Wed Sep 2, 2009
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