Full Price or Negotiate?

You have spent many long hours searching the Internet, driving neighborhoods, looking at property. You have had dreams about the day you find the home.

It seems there is no rhyme or reason to how home prices are calculated. You have seen homes that you think are worth way less than what they are asking and you have seen homes that appear to be a steal! How do people come up with these ridiculous prices?

Working with a REALTOR® that specifically represents you and your interest in buying a home makes the process easier. Together you have toured homes, drove neighborhoods and discussed the process.

You have found the one. You want the home. You can already picture your couch in the living room, the flat screen above the fireplace and your trusty dog at your feet. You want it so bad you can taste it. So you may as well offer full price, right? Wrong!

When getting ready to make an offer, one of the questions you have is should you offer full price or negotiate? There isn't an easy answer to this question. Your REALTOR® will be able to provide you with a detailed report of the most recent sales in the neighborhood. The last 90-120 days will give you a realistic idea of what home sale prices in the area are. Some of the things you will want to consider:

• Is the home in better or worse condition than the homes that have sold?
• Are there any other offers?
• How long has the property been on the market?
• Why is the property being sold; is it a short sale? a foreclosure? a traditional sale?
• Are you willing to walk away? What is the max amount you are willing to pay?

By taking a look at all of the factors that come into play when looking at determining an offer price you will be able to make an informed decision. Discuss the factors with your REALTOR®, determine your level of interest and be prepared to negotiate!

Understand different sellers and agents have different strategies. You may find the home is way over priced compared to the recent sales in the neighborhood. Why is that? Is there something this home has that others don't? Is the location better? Will the property appraise if sold at this price? Or you may find the property is listed well under what comparable sales have sold for. This is often a strategy to generate a lot of interest in a property and entice multiple offers. The end sales price may end up being higher than the list price!

Ask yourself if you can walk away. Making a super low ball offer to see if they counter may work, but if it doesn't, are you willing to walk away? Are you willing to go above the list price if the property has been priced below market value? By analyzing where you are willing to be, may help in determining your negotiating point.

So when it comes to determining if you are offering full price or going to negotiate, get the facts, make an educated decision and work with a REALTOR®.