Home Buying in Avon>Question Details

Lulu, Home Buyer in Erlanger, KY

What is a fair offer for a 3 yr old model home that is priced $140,000 higher than other homes in the neighborhood.?

Asked by Lulu, Erlanger, KY Fri Aug 26, 2011

Ranch home, in N.Ky., right on the corner with no privacy, but has everything we want. The pva shows taxes paid on $242,000, asking $380,000 plus.

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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.)

We have found that extremely often, the LISTING PRICE that is set on SHORTSALES and REO’s are not determined, nor even discussed with the Bank: The banks play their cards very close to the vest, they will not tell the Listing Agents any more than they have to; they will not give us their lower limits. So usually, the LISTING PRICE on a distressed property is a number taken out of the air.

Have a Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. If you look at enough CMA’s, you will see the trends.
1 vote Thank Flag Link Fri Aug 26, 2011
I suggest that you retain a Buyer's Agent to assist you. The Seller (builder?) pays the commission for the Buyer's Agent. Normally builders require a Buyer's Agent to register you before you first speak to the builder. However, with a 3 yr old model the builder should allow a Buyer's Agent to represent you and negotiate on your behalf. The Buyer's Agent can help you determine the offer given comps in that development & others nearby. The builder is probably looking to recover the cost of upgrades in the model.
0 votes Thank Flag Link Sat Aug 27, 2011
Lulu a local buyer broker can easily assess what the market value is so you can base your offer on that.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Fri Aug 26, 2011
Consult with a local real estate agent who can advise you the fair market value for the property based on comparable sales of similar properties.
If you are financing, your lender will not allow you to proceed with the contract unless the property appraises.
If you are paying cash, you could stipulate that the contract is contingent on an appraisal of the property.
As always consider consulting with an agent or an attorney.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Fri Aug 26, 2011
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