“A home that meets my needs, at the lowest possible price,” is every homebuyer’s creed. Yet, when a home buyer goes shopping for a home, two homes compete for their dollar: a home that meets his needs, and a home that fulfills their desires. The goal is to find a home that meets these two criteria. However, in the real world, this rarely happens. Usually, it is a compromise of needs against wants relative to price.
Sometimes, a buyer falls in love with a home for the wrong reasons. Later, they regret the choice because the home does not match their needs. It may be too big, too far away from work or school, or even too large to maintain. In the long term, a dream home ends up being a costly investment.
While it sounds simple, decide what you want in a home before you shop. Take off the rose-colored glasses. As much as possible, look at your needs and the home you are considering, objectively.
How prices are set
Usually, four common strategies are used to price a home. Understanding these techniques can help you get a better deal on your home, while matching your needs.
Every seller wants to get the best price on their home. However, with multiple offers, the battle may be won by inflating the price, anywhere from 10-20% of its true market value. Too high a price could leave the home on the market for months. If it does not sell, it could be considered a “problem.” The price may have to be reduced to sell it.
Homes in this category also tend to sit longer on the market. The reasons: there may be room for negotiation in the price, or the seller is emotionally attached to the home.
Priced at fair market value
These homes tend to sell within a reasonable time, close to the asking price. Competitively priced, they represent a thorough analysis of other homes on the market.
Priced below fair market value
For various reasons (including health, relocation, condition of the home, divorce), a seller may want to sell a home quickly. This type of sale often results in multiple buyers, with the home being sold quickly.
A Real Estate Professional can provide you with a thorough analysis of any home you are considering. This price will be based on market conditions, similar homes in the neighbourhood and condition of the home. At the same time, a Real Estate Professional will work with you to match your needs to the price, in a great neighbourhood.