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This home buying tip will help you evaluate the
seller's asking price before making an offer on the
home.
Why Is It Called an Asking Price?
The phrase "asking price" is very telling. Sellers
will ask for a certain amount. They may get that
amount, they may get more, they may get less -- it
all depends on the market. So the first thing to
understand is that price and terms are always
negotiable. If an asking price wasn't negotiable, it
would be called a fixed price.
What Makes Up the Asking Price?
A seller (and a seller's agent) will look at market
conditions, comparable sales in the area, home
improvements and other factors. Based on that
information, they'll ask for a certain amount.
With that being said, there are some people who take
a less analytical approach when setting the price.
These people want a profit, and they're willing to
ignore reality in hopes of getting it. These types
of sellers price their home well above market
conditions and comparable sales, in the hope of
earning a big payday.
The lesson here is that some sellers set realistic
prices, while others don't. So don't every think:
"Well, gosh, that's the price they've set ... so it
must be realistic." Always do your homework.
Remember, if the home is priced high by the seller
and gets appraised low by the lender, you could have
trouble getting approved for the loan.
How Do I Research Comparable Prices?
1. Use the Internet
Over the past couple of years, a number of
home-valuation websites have sprung up. These sites
will give you the *estimated* value of a particular
home, based on local sales data and other factors.
Keep in mind, however, that the "freshness" of their
data varies greatly. Check a home's value on three
different sites, and you'll probably get three
different price ranges. The key is to shoot for the
averages.
Some websites to get you started:
* www.domania.com/homepricecheck
* www.homepricecheck.com
* www.homegain.com
* www.housevalues.com
* www.zillow.com
2. Know Your Market
Are you in a buyer's market, a seller's market, or
somewhere in between? You should be able to answer
this question without hesitation. If you don't know
what kind of market you're in, you won't know your
true bargaining power. For example, in a seller's
market, you'll probably be less successful trying to
negotiate price. But in a buyer's market, you'll
have more leverage. Keep up with real estate news
and trends in your area. Know your market!
3. Follow Your Agent's Advice
Real estate agents are tapped into the local real
estate scene. A good agent will help you identify
and evaluate comparable sales in the area. This kind
of analysis will help you set a realistic offer
amount based on actual data.
Conclusion
Don't accept the asking price at face value. Verify
and validate it. Do some homework to see if it's
realistic or out of left field. Keep up with the
real estate market in your area. Choose a
knowledgeable agent who can help you make sense of
all the data. This home buying tip will help you
become a smart shopper and a well-informed
negotiator.
* Copyright 2006, Brandon Cornett. You may republish
this article if you keep the byline and author's
note, and also leave the hyperlinks active.
Learn more!
This
home buying tip was brought to you by
HomeBuyingInstitute.com, the Internet's largest
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buying intelligence by visiting:
http://www.homebuyinginstitute.com!
Article Source:
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