As a Realtor in Fort Wayne, I get asked certain questions by my buyers a LOT.
One of them is always "What did the seller pay for the home when they bought it?"
It's obvious why my buyers ask this question so much. They don't want to over pay for a home. It's that simple.
Here is my response to every buyer that has ever asked me that question:
It doesn't matter.
Gasp! What? What do you mean it doesn't matter???
The home in question was a flipped home. The owner bought it as a foreclosure for $35,000. He put X amount into it, and put it on the market in amazing condition at fair market value at $89,900.
My buyer was concerned that she may be over paying for the home based on the $35,000 purchase price. I understand her concern, but explained it to her and showed her the current market, and that it was priced to sell.
She understood and purchased the home for $88,900.
The home in question was previously purchased for $200,000 in 2005. It was listed for $225,000.
My buyers were concerned when they saw this, and again, didn't want to over pay for the home.
Even more concerning for them was that the current owners didn't really make many improvements on the home to (in their minds) justify the asking price.
What they didn't know was the previous owner's situation in 2005. They HAD to sell due to medical issues, and the current owner got a heck of deal at $200,000.
I showed them that $225,000 was a fair market value and after some negotiating, they purchased it for $220,000.
My point here is simple.
If you are going to purchase a home, focus on the current market, not the past. I'll tell you if the home in question is priced where it should be, or if it's over priced.
I wouldn't focus on what the current owner paid for it, or how much (if it's a flip) the owner is going to pocket.
That doesn't matter. Make sense?
If you are considering buying a home in the Fort Wayne area, and would like a Realtor that knows the market and will help you decide whether something is priced right or not, please give us a call at 260.704.0842. We look forward to hearing from you!