Cleveland OH Real Estate - How Much Can I Get That Home For?

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Cleveland OH Real Estate - How Much Can I Get That Home For?

Cleveland OH Real Estate - How Much Can I Get That Home For?

how much is that home worth?

When working with buyers, we are often asked this question and the simple answer is this: we don't know!

I realize it may sound shocking that someone who professes to be a real estate professional would openly admit to not having an answer about something related to real estate, but the answer is complicated.

The final purchase price of a home depends on many variables, the most important being the sellers motivation. However, until the negotiating process has been played out, there really is no way to determine what a seller will accept for their home. In many cases, even the seller doesn't know what they will accept until they have received an offer and crunched the numbers.

I realize that buyers want some level of certainty and would feel more comfortable knowing everything up front. Sure, it would be great if the listing you saw on line read, " great home, priced at $199,999, but the sellers said their bottom line is really $170,000." Unfortunately, it just doesn't work that way. However, we do have some thoughts on finding a home's value that may be helpful.

To begin, market statistics mean alot as they are based on cold hard facts, not opinions. Here are statistics from home sales over the last 6 months in some popular Eastern suburbs here in Cleveland. The figures below show the relationship between average final sales price vs. average final list price:

Beachwood - $278,911 / $299,338 = 93.18%

Moreland Hills - $316,632 / $334,611 = 94.63%

Pepper Pike - $338,072 / $358,562 = 94.29%

Orange - $245,242 / $268,198 = 91.44%

Solon - $287,006 / $306,145 = 93.75%

Twinsburg - $211,594 / $221,345 = 95.59%

Based on the figures above, a home can expect to sell for about 94% of the final list price. The challenge can be to determine whether or not a home is price competitively, where it will likely receive an offer, or if it is overpriced and due to be reduced at some point in the future.

We recommend that you educate yourself on the market by seeing a lot of homes in your price range and follow the status of these homes. At some point, you will have seen enough homes that you will be able to walk into a home and know if it is a good value. However, other buyers will recognize this too, so if you find a great home at a great price, don't delay for risk of losing it.

If you are a buyer expecting to get a home for 20% off list price, it probably won't happen on a home that is the nicest in it's price range. However, if a given home appears grossly overpriced based on comparing it to others you have seen, there certainly may be more negotiation room here.

One thing to note is that some sellers know their home is overpriced but just don't want to lower it. They may be open and expecting to negotiate, so don't let a price keep you from trying to buy a home that you really love.

More important than determining "how much can I get that home for", is using statistics and market knowledge to determine "how much a given home is worth to you", because that is really the question that you should be focusing on and can be answered prior to beginning negotiations.

When all is said and done, learning the market is important and having a knowledgeable agent to guide you throught the process is critical to your home buying success.

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About The Authors:

This information is provided compliments of Amy and Dan Schuman, The Schuman Team Keller Williams Realty. The Schumans service both the East and West sides of Cleveland and have worked with numerous professional athletes, business owners, and executives who are relocating to Cleveland. They specialize in the Cleveland Ohio luxury home market and also enjoy working with first-time buyers as well.

If you are looking to buy or sell Cleveland real estate, including the surrounding suburbs, please contact the Schuman Team at 216-346-3235.

SEE ALL CLEVELAND AREA HOMES FOR SALE BY CLICKING BELOW:

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Cleveland OH real estate - How Much Can I Get That Home For? is the property of The Schuman Team and may not be duplicated or used without their written consent. ©Dec 2009

Posted by Dan and Amy Schuman- Cleveland OH Luxury Real Estate on 12/15/2009 04:10 PM

Comments (29)

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Originally posted at: Cleveland Real Estate And More: Cleveland OH Real Estate - How Much Can I Get That Home For?

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29 Comments on Cleveland OH Real Estate - How Much Can I Get That Home For?

DEC

2009

I get calls regularly from consumers asking me "How much will the seller take". or "What's the seller's bottom line".

You gotta love it.

However, when I sit with a buyer to determine asking price we start with market stats, CMA and more.

They may wish to start lower, but soon learn.

It all seems like price is the issue. Cant wait till the market turns, hope I not old and gray.

Great post Amy and Dan. I really like the way you used your stats.

Dan & Amy, this is brilliant! I get asked this question all the time, and I never think about the fact that I am the 'expert' and even I don't know the answer to this question!! I reblogged you - it's THAT good!!! Congrats on the feature!!!

Great post! There really does seem to be something in the air because most of the buyers that I work with initially think that you can offer $30,000 or 20% off the list price, but in most of the Atlanta neighborhoods, homes sell for 94% to 97% of the list price. Sometimes you can get 10% or 20% off the price, it is just a case by case basis.

Dan and Amy, Congratulations on the Featured Post.

I like your presentation of the List to Sales Price percentages. Also, you highlighting that pricing of a home is motivated by the seller. With that said, I assume you have seen some homes priced well below market with notice that all offers will be reviewed 10 days in the future. Too many times buyers believe they can buy the home below the list price when we know the property will end up being sold above the listing price. We know the list price it intended to create activity and showings of the property.

GREAT post... I can see why is was featured..... I also have told owners that buyers will always try to save some money on the initial price they list the home at.

I have also counselled buyers to make full price offers on homes they loved, so there would be no problems getting the offer accepted by the owner...

It can go both ways.....

Again... GREAT POST!!

=-)

Lenn, Pete, Sybil, Kerry, Alexander - Thank you so much for reading and your kind remarks.

Dawn- It was so nice meeting you a few weeks ago and I look forward to more "tech" meetings. I'm glad you liked my post and thanks for the re-blog.

Tim - Thank you as well for your comments. I believe things are starting to turn here in NE Ohio and there are buyers who will be kicking themselves for not taking advantage of this favorable market, especially if they are not under contract by April 30th.

Great post you guys!

Here in the Sac Metro area sold vs list averages are very high. In some neighborhoods, the Sp/Lp% is over 100%. Considering the potential for interest rate increases, I have a hard time thinking that buyers will get in a much better position to buy than they are in today... we'll see! Good job!

Ken

What don't you have a crystal ball? I though every agent got one with their license - LOL

If we had that crystal ball we would be great wouldn't we?

The funny thing to me is that there are often buyers who are not represented by me who want me to answer that question. I NEVER venture a guess then.

I love your post - it's very thorough and I like the way you average out the different areas...

Good post and good points. I have found that the key for me is to be able to effectively communicate the complex answer in a concise way. Oxymoron I know, but that's what's working for me. The consumer isn't privy to all of the complexities that go into the answer so it's our job to educate them. It's frustrating at times but it's also rewarding.

DEC

2009

Dan and Amy: Whenever I am asked... "How much will they take ?"... my favorite answer is... "I don't know, but I know a great way to find out... ." They then look at me kinda funny-like. It's so fun. Then... sooner or later... we end up making an offer. Yes... much fun !

By the way... Super Job ! Congratulations on your Featured Post and your Gold Star ! Hooray for You !

By the way... after reading all the comments... I will say... that I rarely get into percentages, or statistics, or any of that stuff. Usually when my buyers ask me that question... it simply means they want the house... and don't want to horse around taking a chance that they will loose it. So... we end up making a pretty decent offer.

GOOD MORNING DAN! I had to stop and say - CONGRATULATIONS! You've written so many wonderful posts and I'm happy to see this featured! --Gabrielle

Hi Dan and Amy, so true. Some folks have some very unrealistic expectations in todays market.

Ken - It's nice to see you have some areas that are close to 100% SP/LP, a sign of a good market.

Corinne and Damon - Unfortunately, no crystal ball, but it is funny that buyers think we have the magic answers to questions that cannot be answered easily.

Emily - Thank you for your comments. I agree, nothing is worse than someone not represented by us asking for our opinion. I had this happen recently as the buyer chose to work directly with the listing agent as he thought he would get a better price, but kept calling me to get a pricing opinion. Needless to say, I didn't give him my expertise and he ended up, in my opinion, overpaying for the home.

Nathan- You hit the nail on the head, communication is the key, especially with complicated subjects.

Karen Anne - Thank you for commenting and nice to hear from you. I'm sure you aren't missing the cold and wind here in Cleveland. We like to have fun with these types of questions as well, and I realize buyers sometimes ask things because they don't know what else to ask or just don't know how to get to the next step, so I suppose we all have a special way of guiding our clients through the process.

Gabrielle - Always nice to hear from you and thank you so much for your kind words. I'm still amazed at how early you start your day.

Gabe - Thank you for commenting as well. I agree, buyers and sellers both often have unrealistic expectations but a little education often goes a long way.

This is excellent! I'm bookmarking this to use as an example in conversations with my buyers. I have one who'll love the statistics in our area!

Great post topic and your comments are educational as well! Have a great day!

Erin - The real analytical clients love to see numbers, thanks for commenting.

Marilyn - Thanks for stopping by and you have a great day as well.

Hi Dan and Amy -- Well said and I totally agree. Sometimes, there may be an artifical constraint on a property in that the seller bought a few years ago, is hoping to break even, but the market has plunged 20% over the past few years and their home is no longer worth what the market is currently willing to bear. Sometimes these sellers need a certain amount to keep it from being a distress sale, or simply don't want to lose money. It takes a savvy agent who knows and can research the local submarket for relevant comparables to properly advise a buyer so they can make a well informed decision. You write so well and this post is very, very informative and I hope buyers out there read it.

Dan & Amy, The real number of what they will take varies tremendously. Typically, we can gather a lot of data, but determining their MOTIVATION is critical. One property I helped buyers get this year, went much lower than I expected (and felt it was worth), but they were highly motivated and able to bring money to closing to get it off their backs. Great deal for my client, but I was preparing them for a higher number, as that is what the stats were telling me. So, you never know until you try. All the best, Michelle

DEC

2009

Chris and Michelle - Thank you so much for your comments. Hopefully buyers will realize that a lot goes into determining an answer to this often asked question.

We don't know how much the buyer can get the home for, but we can take a fairly educated guess based on comparables and actives still on the market.

What they offer will depend upon their own motivations.

Of course when you throw in short sales and the banks, that's a whole new story.

DEC

2009

I definitely see a RE-BLOG in our future. LOL! I get asked that question all the time. My other favorite is: how much did the seller accept (when the property is still showing as under contract)! Great post!

Christine - Thank you for comments and yes, motivation is always key.

Danielle - Feel free to re-blog. It is a question that comes up quite a bit so it is good to be prepared for an answer.

DEC

2009

Dan and Amy, I always tell my buyers that there is only one way to get an answer to that one - write an offer. And the important number is the price, in relation to area market values, not how much off the list price you are paying. Getting a hugely overpriced place for 60% of the list price might cost you more than one at over a reasonable asking price that got bid up a wee bit.

Pat - We agree wholeheartedly with you. Some buyers are just so afraid to take that step to write, especially the first timers. Thanks for stopping by.

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Dan and Amy Schuman- Cleveland OH Luxury Real Estate

Solon, OH

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Howard Hanna Real Estate Services

Address: 28879 Chagrin Blvd, Cleveland, oh, 44122

Office Phone: (216) 831-0210

Cell Phone: (216) 346-3235

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