We're Offering Less Because the House is Used
First time buyers are just that...novice. As realtors, it is our job to guide them and at times hold their hands.
Never assume what first time buyers may or may not know. Read the blog below written by Tammie White. Her clients needed special guidance and she instructed them to maturity...
We're Offering Less Because the House is Used
When working with first-time home buyers, I try to anticipate every question they may have about the home buying process. I cover a great deal about buying real estate in Franklin TN on my website and through our discussions, however, things always come up that aren't anticipated. Tonight was one of those times.
While showing homes, my first-time buyers asked what I thought a house listed at $310,000 would eventually sell for. As I produce market reports and know this Franklin TN neighborhood well, I suggested the home would probably sell close to asking; maybe within a few thousand dollars of list price.
To my surprise the buyers said, they would offer $50,000 less than list. That would be a whopping 84% of list price in a neighborhood where the actual average sales price is 99% of list.
I asked why they would offer $50,000 less. Their response, "We're offering less because the house is used." This house was built in 2001 with no improvements. It had the original roof, HVAC, cabinets and countertops. It was obvious the home was well-maintained. However, the buyers were looking at this house as a depreciating asset, similar to a car.
I asked them how much they thought the home sold for 12 years ago. They guessed $360,000. I pulled up the tax record to discover that the home sellers had bought the house 8 years ago for $235,000. The buyers were shocked. They had assumed that since it was used, it would go down in price, not up.
I had to explain that buying a house is not like buying a car. A house is a long-term investment and should increase in value by 3-4% per year. I told them that there may be exceptions depending upon other events that occur in the economy. But for the most part, a home should increase in value depending upon the number of years they were in the home and any improvements they made.
They hadn't considered this before. They were thinking it was something that would decrease in value. Therefore, they wanted to pay as little as possible to minimize their loss down the road.
Now that they understand the home they buy will actually increase in value, they may be in a better place to make a reasonable offer and not lose the house of their dreams.
If you are buying a Franklin TN home, make sure you ask your real estate agent the right questions. There are no questions too silly to ask. Buying a home is an important step and you want to make sure you understand all that is involved in the home buying process.
For more information about buying real estate in Franklin TN, contact Tammie White at (615) 495-0752.
************************************************************************************Tammie White, Realtor® in Franklin TNCell Phone: (615)495-0752This posting and the contents written here are the intellectual property and opinions of Tammie White of Benchmark Realty LLC.
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