Can A Real Estate Deal Ever Just Be A Deal?
I totally get it… Everyone wants a deal when buying a home. Right?
Sometimes, people get so wrapped up in “making a deal” and hammering a seller on a price, that they end up paying more for a home than necessary.
How do they end up paying more? By being too aggressive with their offers they tend to lose several properties while wanting to hammer the seller for a really good deal that rarely exists. The market doesn’t wait for people to learn their lesson. Prices can rise while you haggle over peanuts.
Eventually, in certain markets, buyers realize that paying at or near asking price ( or more! ) can be a “deal”, even if they weren’t able to work their magic negotiating skills squeeze someone for every last nickel.
I’ve seen this happen a lot, and I never really thought it would make sense to write about it, because the tone of the post can be hard to explain.
The last thing I am trying to do is to say that there is no negotiating needed when buying or selling a home!
The reality is, knowing the market and knowing market conditions is a BIG part of knowing how much to pay for a property. Having proper representation and listening to your agent can be VERY helpful.
I’m just going to talk about a few examples and try to let people know why it is important to work with a REALTOR who really knows how to look out for your best interest.
For some people, it is hard to take advice when buying or selling. They know the market and they know how to make a deal… For others, advice is exactly what they want. They want direction, they want someone with experience who will help guide them through the home buying or selling process. The reality is, the market always knows the price!
Here’s an example that comes up a lot this time of year as people begin to try to find housing for their student at ASU.
They often call from a state where the market is completely different than what it is here in Tempe. Many want a 3 bedroom home for Johnnie or Suzie with a garage in a really nice neighborhood for under $250,000. They saw one on Zillow, and they want to see some properties over the next few days while they will be in town. Here’s the problem: You won’t need a few days, you probably won’t need more than an hour, because IF a 3 bedroom home with a garage came on the market near ASU, there’s a really good chance it would be sold way before your head stopped spinning.
Typically, it doesn’t take too long for them to figure it out. Unfortunately, they sometimes lose out on a good property before learning their lesson.
A textbook example of someone wanting a deal near campus happened recently. A guy says that he wants a “nice gated community” for his daughter to live near campus. His budget began at $200,000. Um, that’s tough, because he also doesn’t want to “pay too much” for the monthly maintenance (HOA) fees. I showed him some gated communities in Tempe like North Shore, Regatta Pointe and over at Villagio. North Shore was “perfect” but the HOA fees are “too high” for him. Regatta Pointe also fit their criteria but only had one floor plan in his price range, so we’ll have to keep watching for new ones to become available/ Villagio? It is “kind of far” from campus.
BUT, he just wants a deal…
After looking around a bit and having several conversations about current market conditions, I mentioned a condo that we will be listing for $180,000. This one is near ASU and in a location that should work for them. I happen to know that this price point is VERY attractive for being so close to campus, and I believe the home will sell very quickly. The condo is not gated, but it is close to campus, so he thought he would like to see it. Without ever asking about what had recently sold in the complex, and without knowing what was for sale in the area, he mentioned that the home would need about $10k in repairs and that he would want to pay $170k for this condo.
OK, great… Interestingly enough, the home wasn’t as “nice” as his wife wants for their daughter, so we will need to continue to search for them.
My point here is the fact that the property could easily be worth the $180k the seller will be asking, but his “deal making” mentality never even put him in the game. By the way, when we did put the home on the market, it did sell in less than a week and we had “multiple offers” submitted.
As the market continued to heat up, the buyer began to realise that he was missing out on properties that would have fit the needs of his daughter. Eventually, he figured it out.
So, if you are buying OR selling a home, please consider working with an experienced agent you can trust. One who will help you determine a fair value and help you negotiate a fair price. Nickels and dimes can end up costing dollars…