Think You’ll Never Pay Full Price in this Market?
January 22, 2010 | By Kelley Koehler | Filed Under First Time Buyer, Home Buying
“Well, in this market, I’d never pay full price.”
Not so fast there. There’s a big difference between paying full price and paying full value for a home. There’s absolutely nothing wrong with paying full price – or more – for a house if the value is supported.
Consider the list price to be a general relative indicator of value – we’ll assume when we first see a home that the list price is somewhere in the ballpark of true value. Sometimes the list price is too high and sometimes it is too low. Not every seller is overpricing their home. Some are serious, ready to sell, and price their homes very well.
Be more concerned with value, and not hung up on price. To find value, we’ll look at what other homes are selling for in the area, make adjustments for condition and location and amenities, make adjustments for the effects of the market in general over time.
If we think a home’s value is greater than the price, well, you just might need to offer something over the list price in order to get it. And you’ll very likely find yourself in competition for that home.
Think it doesn’t happen? Fourth quarter of 2009, in Central Tucson – of the 267 sales, 127 were at or above list price. That’s means 48% of the sales were AT or OVER the list price.
If you find yourself a great deal, priced under value, then move on that – and quickly.
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Great explanation of the importance of value over price. It’s good for both buyers and sellers to remember this. The closer to value a home is priced, the more likely it will sell for its asking price or with little negotiation.