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.
Comments
One Response to “Think You’ll Never Pay Full Price in this Market?”
Got something to say?
Got A Question? Ask!
Other Information That Might Be Helpful
- Tucson Market Value and Pricing Tactics (February 24, 2010)
I had a client looking at a property the other day, listed at an incredibly low price. By the time they made a decision and got a lender approval letter (this is why we get these BEFORE we shop for homes!), there were already 9 other offers, bidding up the price at least $30k.
This [...] - Central Tucson Real Estate Market Report – November 2009 (January 1, 2010)
Seasonally, we’ve entered the winter slow down in home sales for Central Tucson. You can see the pattern clearly if you look at the chart of number of homes sold in Central Tucson. Sales tend to taper off over winter and start to pick back up shortly into the new year.
There were 115 units [...] - When the Sales Price Isn’t The Market Value (October 14, 2009)
I was doing some market value research the other day for a little Central Tucson house, in a price range where home buyers wanting to use FHA financing tend to look. I had two decent comparable sales to use – but I noticed one sold to a buyer who used FHA. And that’s a huge flag that more research needs to be done in order to use that sale as an indicator of market values.
- About Tucson (45)
- Bank Owned Homes (3)
- Canadians and Tucson (2)
- Central Tucson (3)
- East Tucson (3)
- First Time Buyer (28)
- Home Buying (102)
- Home Selling (60)
- Homeowner Associations (6)
- Loans and Financing (42)
- Market Discussion (13)
- Market Reports (46)
- North Tucson (3)
- Northeast Tucson (3)
- Northwest Tucson (5)
- Odds and Ends (66)
- Purchase Contract (2)
- Relocating (9)
- Repair Renovate Maintain (20)
- Restaurants (13)
- South Tucson (3)
- Southeast Tucson (3)
- Southwest Tucson (4)
- Top Ten (2)
- Tucson Events (31)
- Tucson Foreclosures and Short Sales (12)
- Tucson Homes Explained (27)
- Tucson in Photos (4)
- Tucson Land (5)
- Tucson Neighborhoods (19)
- Tucson New Construction (2)
- West Tucson (4)
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.