You’ve invested days, weeks, even months of your time into searching the web, traipsing in and out of stranger’s houses and you’ve done it. You’ve finally found the one, The house you can call home! You want to write an offer, but you need to get the best deal, right?
There is no right way to determine what price to offer initially on a home. The process involves a myriad of factors to research and compare that will vary with each situation.
You’ll need to look at sales of comparable properties, and factor in additional data such as the condition of the property, the current state of the Grand Forks real estate market and seller circumstances. With this information in hand, you will be able to determine a fair price range and, from there, establish the price you’re willing to offer.
Compare the sale prices of homes that are similar to the property you’re considering. This is not a list price rather, this is the actual price that a house is sold for.
Common areas that make a home comparable are number of bedrooms and bathrooms, square footage, lot size, method of construction, and age of the home. The Grand Forks market is a very unique market when it comes to comparable houses. Houses were built at different times using different construction techniques and are in various states of repair.
The most comparable home might be on the other side of town and will need to be adjusted accordingly. With the help of a knowledgeable and experienced agent, the most comprehensive and in-depth information can be accessed through the Multiple Listing Service
Observe how the property compares to the rest of the neighbourhood. Is it average, above average, or below average? Inspect the structural condition of the property (walls, ceilings, windows, flooring, and doors).
Pay close attention to the bathrooms, bedrooms and the condition of plumbing and electrical essentials. Check the fixtures such as light switches, doorknobs, drawer handles, etc.
What is the condition of the front and back yards? Cosmetic changes can be largely ignored, but any major improvements should be taken into account.
What is the current state of the Grand Forks Real Estate market? Our market doesn’t always follow what’s happening in major centres like Calgary or Vancouver. In fact, we usually see a longer real estate cycle than most major centres do.
Your Local Realtor
will be able to tell you the current condition of the real estate market at any given time.
If the market is currently a seller’s market, demand for homes in the area is greater than supply. There are more Buyers than homes on the market. As a result, these homes usually sell very quickly, and there are often multiple offers. Many homes will sell above the asking price and your offer should take this into account.
On the other hand, a Buyer’s market occurs when supply is greater than demand, the number of homes exceed the number of Buyers. Properties are more likely to stay on the market for a longer period of time. Fewer offers will come in, and with less frequency. Prices may even decline during this period. Buyers will have more selection and flexibility in terms of negotiating toward a lower price. Even if your initial offered price is too low, Sellers will be more likely to come back with a counter-offer.
A third, often overlooked, state of the market is called a balanced market. In a balanced market, supply equals demand. The number of homes on the market is roughly equal to the number of Buyers. This type of market makes it tougher to decide what offer to bring to the table. Prices will be constant and homes will sell within a reasonable period of time.
Starting with the Comparable sales information helps you establish a price range for the home you’re interested in. Adding in the additional factors mentioned above will guide your decision of where you consider a “fair” price to be. Keep in mind, this price should be the one you’d be happy with once all negotiations are said and done.
The price you decide to begin with depends on your particular style of negotiation. Most Buyers begin the negotiation process with a number lower than the “fair” price they’ve come up with.