Market value is determined by what a buyer is willing to pay. Market value is not a fixed, rigid price, but instead a range of value. This is because no two buyers are alike. While one must have a pool, another will consider a pool a liability. You, the buyer, are the market.
In our current real estate environment, there are two distinct categories of buyers. One includes the traditional buyer looking for a good home at a good “value” today, because today is when they are shopping. The second category of buyer is a little less concerned with timing or even suitability of the property and much more concerned with value, not only in the context of value today but in terms of anticipated value tomorrow or next year.
Regardless of the category in which you fall, keep in mind that both flavors of buyers are in the same market at any given time. Unless your goal is to accumulate a scrapbook of rejected offers you will one day share with your grandchildren, it is critical to remember that you are offering to purchase a home. A home, unlike a share of stock, a gallon of milk, or a commercial office building, is inherently emotional. So, it is helpful to keep in mind a few do’s and don’ts when creating your offer.
Write a cover letter summarizing why you believe this is the right home for you. On many occasions, I have seen a seller accept a lower offer because they felt a connection with the buyer.
No buyer wants to think they paid too much, and no seller wants to think he sold out. Expect to go a round or two. “Take it or leave it” offers are rarely met with high-fives and bear-hugs from the seller. In negotiations, everyone wants to feel like they were in control and that they prevailed.
There is value, and then there is crazy-talk. If a home is offered for X, and you are willing to pay 10% less than X, do not offer X minus 20% and then ask the seller to throw in his bedroom furniture and a pony. You will not be taken seriously.
Today’s real estate market is teeming with opportunity for the buyers. But, insanely great “deals” are still needles in the proverbial haystack, because the market value will always be determined by what a buyer is willing to pay. I will work with you to make sure your offer is strong and that we have discussed every option to get a great house at a great price!