I often have buyers contacting me wanting to get a great deal. Initially they are determined to buy a bank owned home or a short sale home.
The radio and TV ads advertise in such a way that the public think they can just steal a home. Buyers be careful what you steal!
I recently bid on a bank owned home and was lead to believe I had an agreement with the bank. The next day the bank sent me an email stating. "Due to multiple offers we need your highest bid." My first bid was my highest bid. I had done my homework on this house. I do not buy homes to lose money.
A prudent buyer will count the cost before making a bid and will stick to that price. Otherwise you could easily be in the same situation as the previous owner.
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1. Know the market - work with a realtor who has access to all of the sold properties and let him/her really educate you as to what the "real market" value is in particular areas. It takes time but a realtor has the access to and expertise to determine what the "real market" value is.
Real Time Example:
I listed a home in Wilmore and the home sold in 12 days because it was listed at market value. I determined the value using these steps.
1) I searched for properties that sold in the last 3 months that were in the same neighborhood development.. This is exactly what the appraisers will do.
2) I did a comparative market analysis on those homes. That involves comparing age, bedrooms, bathrooms, garage space, etc and adjusting the price accordingly. This is done using monetary values that are standard for the community.
3) I also campared the cost per square foot of the three homes. Note: The average price per square foot of the two houses that have sold is 19 dollars a square foot lower than those that have not sold..
4) I presented these facts to the buyer and let him set the price. He wanted to sell his home and based his price on what had been selling. Not on what he hoped it would sell for, or what a friend told him he should ask, and expecially not on the average price of the other 11 homes in the development that had not sold after being listed more than 180 days It seems many people list their home hoping to sell. Hoping for a lucky day when someone will walk by and fall in love with their home and they will win the "house selling lottery." .
It is my experience in the nine months that I have lived and worked as a realtor in Lexington that homes that are priced according to the real market value sell quickly. I have listed and sold four homes and the average has sold in 59 days. I have worked with buyers who hesitated to make an offer on their "dream home" and it sold immediately afterward.
SO........ If you work with a well prepared realtor he/she will be able to find homes that are priced to sell and you can make an offer before it is too late.
2. Let your realtor look for homes that haven't sold because of other factors. One of those leading factors is that the many homes are overpriced from day one.
On July 5th I did a Comparative Market Analysis of all the homes that sold in area three the previous three months which is roughly the southeast portion of Lexington. I limited the analyis to homes that sold between $390,000 and $815,000. Twenty two of these homes sold in less than a hundred days at an average of 95.6 percent of the original listing price. Seventeen of these homes sold in more than a hundred days at an average of 87.5 percent of the origiinal listing price.
What is most interesting is the homes that sold in less than 100 days sold for an average of $44,000 dollars more than the homes that sold in excess of 100 days. I hope to have time to continue this comparison of selling prices and days on the market in other price ranges and areas of the Lexington housing market.
The price may have been dropped but it is still overpriced. Some of these homes are ripe for the plucking. You will only find out which ones by making an offer. Recently I have helped two people buy homes for an average of 83 percent of the listing price. The percentage would have even been lower if the selling price were compared to the original listing price. I have found that if you do a good job presenting the facts for what the true market value is on the home, you then have empowered the listing agent to present the offer and make it realistic to the seller.
3. Be willing to look at homes that others may skip because of poor pictures on the internet or a very unattractive front yard. It may take only a few dollars to make these "rough looking houses" into a real show place. I am amazed daily by the lack of pictures of a house and the poor quality. Don't let cosmetic issues kill a good deal. In this market the well kept homes priced right sell quickly. Conversely the home with the ugly yard may never even be looked at. So there are diamonds in the rough waiting to get snatched up by a buyer who is able to look under the skin of a house.
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