What Did the Seller Pay for the Home?
Who knows why buyers think this question is relevant, but it seems to come up with somewhat regular frequency when a buyer wants to write an offer on a home.
"How much did the seller pay for it?"
Sometimes I just answer the question. Sometimes I ask them why they want to know. It's amazing to me, but some buyers put themselves in the position of being the profit police and determining, in their own mind, how much is reasonable for a seller to profit. This is especially true when a seller has 
owned the property a short time, like investors who flip properties. Buyers seem to want to determine the cost of the work done and then make an offer allowing a modest profit.
Here's the problem with that line of thought. Just because a buyer has determined a low offering price based on what they feel is a reasonable profit, doesn't mean that the market value for the home isn't really there. Go ahead and make a lowball offer. If it isn't rejected, you'll get a counter. Don't want the seller to make that much money, well, I guess you are going to be looking for another home.
Make those same buyers sellers themselves and the price they paid to re-carpet, paint or do any other improvements is irrelevant when they get offers from buyers of a similar mindset. "What I paid for the house and the cost of improvements doesn't matter. My neighbor's house sold for X and I expect to get X or a little more."
A house is only worth what a buyer is willing to pay. That is true. However, buyers need to understand that in the Northern Virginia marketplace, which includes Fairfax, Prince William and Loudoun Counties, there are plenty of buyers that are willing to pay market value. Keep that in mind.
What a buyer should be asking their agent when they are ready to make an offer is to for the recent sales of comparable homes in the area. Only then can you determine what we call "market value" and make an offer that may have a chance of being accepted. If you offer price method involves figuring out what the seller paid and giving them what you feel they deserve to earn in that amount of time, you are likely to miss a lot of great homes.
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