Results Realty Buzz: Spring TX First Time Home Buyers Guide - What price do we offer? – Part 4 –

Informing you on the Real Estate Market in Spring Texas and the surrounding areas and other interesting tid bits!

Spring TX First Time Home Buyers Guide - What price do we offer? – Part 4 –

Spring TX first time home buyers - how much to offer!I'm often asked by my Spring TX first time home buyers "How much under the listing price should we offer?" This is an excellent question. As I had told you at the end of part 3 (the home search) we will run comparatives going back 6 months to see how the home is priced compared to other homes that have sold in the area.

I have found that Spring TX sellers price their home differently for different reasons. 

1. Ridiculously Overpriced!
Often these sellers have an unrealistic expectation of what their home is worth.  I have found these sellers usually shop real estate agents until they find one that will agree to list at their ridiculous price.  These homes can be 10 to even 30% overpriced. These sellers may need a "dose of reality" for a few months before they begin to realize that their home is way overpriced as compared to others in the area.  If we find a home that is overpriced like this and the listing is new on the market I have found it is sometimes better just to move on.  The longer an overpriced home is for sale, the more likely we can get the seller to face reality and sell at a fair price.Pricing your Spring TX home to sale

2. A Little Overpriced!
These sellers usually fall into 2 categories:
1. The sellers that feel their home is worth every penny of their asking price.
2. Those that want to leave a little "negotiating" room.
These homes can be 4-10% overpriced. When running comparatives I find many homes that are just a little overpriced. 

3. Priced At Fair Market Value These sellers have carefully and realistically studied other homes for sale. They have priced their homes very competitively. These homes usually sell within 4 weeks at or very near the listed price.

4. Priced Below Fair Market Value
These homes are priced below value. Perhaps the seller wants a fast sale. Perhaps the real estate agent recommended too low of a price. These homes usually sell within 7-10 days, at or above the listed price. There are usually competing offers.

At this point we will want to discuss how the Spring TX home is priced and decide what we want to offer.  You want to be careful in this step that you don't make such a low ball offer that you offend the seller.  If the home is ridiculously overpriced then yes the seller may get offended but so be it.  If the home is priced fairly you don't want to come in so low to offend the seller.  Most sellers have left some room to negotiate and so it is okay to be a little aggressive but not so aggressive that it is offensive.  I remember a listing I had where a low ball offer came in and they also asked for my clients' stainless steel grill and a bed.  That was years ago when stainless steel grills were still VERY EXPENSIVE.  During the negotiating another offer came in and he jumped at the other offer as these people had totally offended him.  My seller was very attached to that grill (it was a standalone grill and was not attached to the house). Asking for the grill was way over the top as far as he was concerned.

Bank Protection First time home buyers in Spring TX protected by bank appraisal
Even by carefully studying homes for sale, it's sometimes difficult to establish Fair Market Value. If you're obtaining a new home loan, you'll be protected by the Professional Bank Appraisal. Home lenders want to make sure that you don't over-pay for a home. If the home does not meet value in the eyes of the bank appraiser, you'll be informed. At that time, we can re-negotiate the sale price or void the agreement and refund your earnest money deposit.

My job is to ensure that as a Spring TX first time home buyer you have the tools and information you need to make an informed decision. I will help you prepare the offer. Then I will present it to the seller on your behalf and try my best to get it accepted at your price and terms!  My next post will be on the terms beside price that we will be negotiating.

This is a Spring TX first time home buyers series and as I add additional post I will add the links.  Please feel free to visit my prior post.

  1. Spring TX First Time Home Buyers Guide - Part 1 - Loan Pre-approval!
  2. Spring TX First Time Home Buyers Guide - Part 2 - The Web Search!
  3. Spring TX First Time Home Buyers Guide - Part 3 - The Home Search!
  4. Spring TX First Time Home Buyers Guide - Part 4 - What price do we offer!
  5. Spring TX First Time Home Buyers Guide - Part 5- The Home offer!
  6. Spring TX First Time Home Buyers Guide - Part 6 - The Texas option fee and your home inspection!
  7. Spring TX First Time Home Buyers Guide - Part 7 - The Title policy
  8. Spring TX First Time Home Buyers Guide - Part 8 - Why you need to live in an HOA!
  9. Spring TX First Time Home Buyers Guide - Part 9 -  What to bring to your closing!

 

Comment balloon 16 commentsMarchel Peterson • August 20 2009 01:43PM

Comments

Marchel--This is a good thing for buyers to understand as there is no one sized fits all percentage to be under with an offer. It all depends on how well priced the home is (and if you are the only one writing an offer.)

Posted by Teri Eckholm, REALTOR Serving Mpls/St Paul North & East Metro (Boardman Realty) almost 10 years ago

Marchel

Great series and super information that explains to the first time buyer the alternatives

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) almost 10 years ago

Marchel, You offer such quality information for home buyers and sellers. Interesting and easy to read. I enjoyed looking over your other websites and blogs today. Kate

Posted by Kate Kate almost 10 years ago

Marchel, Fair Market Value priced homes are the best for the seller if they are trying to maximize what they will get and optimize their time on market.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 10 years ago

Marchel, I know you would do a wonderful job for your clients in Spring TX.  I've seen some overpriced homes that sit on the market while others that are fairly priced move quite quickly.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) almost 10 years ago

Hi Marchel, Those seller who want to price their homes too high need to think about the appraisal.  I had a recent unfortunate experience with that situation.

Posted by Shirley Parks, Broker, 210-414-0966, San Antonio TX Real Estate (Sands Realty 210-414-0966) almost 10 years ago

Marchel, the point you made about appraisals at the end is an important one.  Appraisal plays a big role in the process, especially on FHA Mortgages.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 10 years ago

Hi Marchel, wonderful series of posts for the First Time Homebuyer! Pricing in the key, and I see that those homes priced well are not on the market for long! You're right, it is amazing that a "small " thing like the grill can create a big problem.  Sometimes it's curtains.....

Posted by Mary Douglas, REALTOR, Red Feather Lakes, Colorado (United Country Ponderosa Realty, Red Feather Lakes, Colorado) almost 10 years ago

Marchel - This post shows the value that a buyer's agent brings in negotiations.  If the buyer doesn't know what the price of the home should be, they can think they are getting a bargain and yet they are overpaying on an overpriced home.  I've also seen clients want to bid 5% under on a underpriced home and then lose out because others bid more. Excellent advice to start with the true value of the home.

Posted by Gail Robinson, CRS, GRI, e-PRO Fairfield County, CT (William Raveis Real Estate) almost 10 years ago

Howdy there Marchel

You sure are writing a loat very helpful info, in your series for the First Time Home Buyer. Folks sure do seem not to understeand this here prat of the buying of a home.

Baker Home Inspection and Consulting AR Signature

Posted by Dale Baker, New Hampshire Relocation Real Estate Information (Baker Energy Audits and Commercial Properties Inspections) almost 10 years ago

Marchel - I can imagine that is a common question you receive when preparing to make an offer on a home. I think most people WANT to be fair with the offer but dont want to be taken advantage of. Good tips provided.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) almost 10 years ago

Marchel - Great advice again.  In order to be a good buyer's agent there is quite a bit of homework involved and a lot of educating the client.  Well written series.

Posted by Irene Tron almost 10 years ago

TERI, You are so right and when you go in to that multiple offer situation it is so precarious.  I have found that often the client thinks someone is trying to pull the wool over their eyes.  That is until they lose out on the home.

TOM, I so remember being a first time home buyer and it was so scary.

KATE, Thanks!  I appreciate you including me in your directory.

GARY, When a house is priced at market value it sells so fast.  The over priced seller thinks well someone will just offer lower but I have found it just doesn't work that way.

CAROLE, Those overpriced homes just sit and sit.  While the one that is priced right is on and off the market in record time.

SHIRLEY, I had one of those appraisal problems recently also.  This home was priced good and it should not have happened but it is the world we live in right now.

 

 

 

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) almost 10 years ago

Marchel this is a great series to educate the consumers.  Ithighlights how much work an agent does have to put into project to help the client make the right decision.

Posted by Jennifer Fivelsdal, Mid Hudson Valley real estate connection ( JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571) almost 10 years ago

MARY, Isn't it amazing the small things that people can get their backs up about!! (like a grill or curtains)

GAIL, My husband has a co-worker who is buying a house down in Galveston from a FSBO. I worry about what kind of a deal he is getting.  You just don't know what you have without running the comparatives.

DALE, Buying a home is a complicated process.  I have one more post and then I will be talking about getting a home inspection.

JOHN, Price is what most people think about when negotiating.  This is only a part though.  Tomorrow's post will go in to ALL the other things.

IRENE, There's so much involved in a real estate transaction.  I remember almost 13 years ago when I got in to the industry and I heard with the Internet Real estate agents would be a thing of the past.  That is NEVER going to happen there are just too many intricacies.

 

 

 

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) almost 10 years ago

Lots of interesting tidbits to consider.

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I wonder if reading the info on this new site might help streamline the process for some folks.  http://www.firsthomeexperience.com/main/  has tips for buyers, some great info for realtors and several easy to enter contests.

 

If you have a minute, could you check it out and tell me what you think?

 

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Posted by Erin Wolf almost 10 years ago

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