House Offers Should Not Be Arbitrarily Set By Buyers
Today, the market is flooded with houses for sale. There are over 20,000 properties for sale in the Multiple Listing Services in Pinellas County right now. Many experts in the field have said that sellers are going to have to reduce asking prices in order to entice buyers to make offers on these properties. The general feeling among real estate professionals is that sellers need to get much more realistic about their asking prices if they are going to have much success in selling their property.
The thing is, buyers need to start getting more realistic about their offers as well. Too often, buyers are making offers that are based on "feel" or "take-it-or-leave-it" attitudes.
Offers to purchase should not be arbitrarily set, but should be based on verifiable data supplied to the buyer by his or her real estate agent.
One of Pinellas County's premier buyer agents is Debbie Deeb of Tourtelot Brothers in St. Petersburg, Florida. Debbie has specialized in representing buyers for many years, has been stunningly successful in her real estate career, and has some unique viewpoints on how buyers should formulate their offers. I asked Debbie to share some of her thoughts on how buyers in today's market should formulate values for their offers. Here's what Debbie Deeb suggests ...
The first thing Debbie points out is that all property has a value range. A buyer's offer must be within the property's value range. The range is based on overall values for similar properties in the immediate area of the property being sold. A buyer must determine if the property they are looking at falls into one of three categories within the value range -- high value, average value or low value -- for the area or subdivision. When making this determiniation, the buyer should consider such things as the property's square footage, amenities, location within the neighborhood and overall condition. Determining this value range should be done through an analysis of sold prices for similar homes and the current asking prices for properties on the market.
This value range is, essentially, a Comparative Market Analysis of the house prepared by the buyer's agent. It is based on current and historical data and an analysis of the property's condition. Essentially, this is the same type of thing that is done by a listing agent when working for the seller, but this time the analysis is done on behalf of the buyer in order to bring the property within a value range for the buyer.
"Property is worth what somebody is willing to pay for it," said Debbie. "But setting value is not an exact science, even for appraisers. A buyer should put a house within a value range and make an offer within that range."
Once the value range has been determined, the buyer should make an offer and be ready to negotiate further with the seller. If the buyer's offer is too low on the value range scale, the seller may be so insulted that they do not want to have further discussions with the buyer. When this happens, the buyer runs the risk of losing the house. "Even in this market, if you go too far below what the property is worth you run the risk of insulting the seller and losing the house you really want. Buyers need to weigh the risks of a low offer, especially if they really want the house, versus what is to be gained by making a legitimate offer within the property's value range."
Debbie also points out that property condition can be a very tricky point in determining value range and making an acceptable offer. "What a buyer wants to do to a house to modernize it and bring it up to 'their' standards has little to do with the value of the house," said Debbie. "Once you determine the value range, you can not say I want to do $50,000-worth of remodeling, so I'm going to subtract $50,000 from my offer." A buyer who does this is really telling the seller that they want the seller to pay for all the remodeling costs. Sellers just aren't going to do that.
Debbie stresses that if the house is within a legitimate value range in its asking price, arbitrarily cutting the price will probably result in a rejected offer. "There are some very good listing agents in the marketplace right now who help sellers price their properties within the correct value range. A buyer has to know if the house is priced correctly -- within the proper value range -- before they start arbitrarily reducing their offer."
"No one knowingly sells their house for less than it is worth, even in today's market," said Debbie. "You can not expect to successfully buy a property by making an offer outside of the proper value range."
Finally, Debbie suggest that all buyers retain the services of a professional buyer's agent. She points out that the market is changing rapidly now, and that the rules and regulations associated with buying property change almost daily. Going it alone is not a smart thing to do. "It doesn't matter how many houses you have bought and sold, only an experienced agent can help you with the challenges and opportunities that come up in a real estate transaction," said Debbie. "In this market, there are things happening that a buyer may have never encountered or even heard of in the past. Their best protection is to hire an experienced buyer's broker."
Thanks Debbie!
For more information on real estate in the Tampa Bay area, visit my website at www.TheStPeteRealEstateSite.com.
The thing is, buyers need to start getting more realistic about their offers as well. Too often, buyers are making offers that are based on "feel" or "take-it-or-leave-it" attitudes.
Offers to purchase should not be arbitrarily set, but should be based on verifiable data supplied to the buyer by his or her real estate agent.
One of Pinellas County's premier buyer agents is Debbie Deeb of Tourtelot Brothers in St. Petersburg, Florida. Debbie has specialized in representing buyers for many years, has been stunningly successful in her real estate career, and has some unique viewpoints on how buyers should formulate their offers. I asked Debbie to share some of her thoughts on how buyers in today's market should formulate values for their offers. Here's what Debbie Deeb suggests ...
The first thing Debbie points out is that all property has a value range. A buyer's offer must be within the property's value range. The range is based on overall values for similar properties in the immediate area of the property being sold. A buyer must determine if the property they are looking at falls into one of three categories within the value range -- high value, average value or low value -- for the area or subdivision. When making this determiniation, the buyer should consider such things as the property's square footage, amenities, location within the neighborhood and overall condition. Determining this value range should be done through an analysis of sold prices for similar homes and the current asking prices for properties on the market.
This value range is, essentially, a Comparative Market Analysis of the house prepared by the buyer's agent. It is based on current and historical data and an analysis of the property's condition. Essentially, this is the same type of thing that is done by a listing agent when working for the seller, but this time the analysis is done on behalf of the buyer in order to bring the property within a value range for the buyer.
"Property is worth what somebody is willing to pay for it," said Debbie. "But setting value is not an exact science, even for appraisers. A buyer should put a house within a value range and make an offer within that range."
Once the value range has been determined, the buyer should make an offer and be ready to negotiate further with the seller. If the buyer's offer is too low on the value range scale, the seller may be so insulted that they do not want to have further discussions with the buyer. When this happens, the buyer runs the risk of losing the house. "Even in this market, if you go too far below what the property is worth you run the risk of insulting the seller and losing the house you really want. Buyers need to weigh the risks of a low offer, especially if they really want the house, versus what is to be gained by making a legitimate offer within the property's value range."
Debbie also points out that property condition can be a very tricky point in determining value range and making an acceptable offer. "What a buyer wants to do to a house to modernize it and bring it up to 'their' standards has little to do with the value of the house," said Debbie. "Once you determine the value range, you can not say I want to do $50,000-worth of remodeling, so I'm going to subtract $50,000 from my offer." A buyer who does this is really telling the seller that they want the seller to pay for all the remodeling costs. Sellers just aren't going to do that.
Debbie stresses that if the house is within a legitimate value range in its asking price, arbitrarily cutting the price will probably result in a rejected offer. "There are some very good listing agents in the marketplace right now who help sellers price their properties within the correct value range. A buyer has to know if the house is priced correctly -- within the proper value range -- before they start arbitrarily reducing their offer."
"No one knowingly sells their house for less than it is worth, even in today's market," said Debbie. "You can not expect to successfully buy a property by making an offer outside of the proper value range."
Finally, Debbie suggest that all buyers retain the services of a professional buyer's agent. She points out that the market is changing rapidly now, and that the rules and regulations associated with buying property change almost daily. Going it alone is not a smart thing to do. "It doesn't matter how many houses you have bought and sold, only an experienced agent can help you with the challenges and opportunities that come up in a real estate transaction," said Debbie. "In this market, there are things happening that a buyer may have never encountered or even heard of in the past. Their best protection is to hire an experienced buyer's broker."
Thanks Debbie!
For more information on real estate in the Tampa Bay area, visit my website at www.TheStPeteRealEstateSite.com.
posted by Terry Ward at 5:25 AM
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