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Where to Price Your Initial Offer

Where to Price Your Initial Offer

avatarthumbnail.jpgIt’s the second most common question I hear, trailing only “why do you use your photo instead of letting Tobey roll solo” – “how much should I offer for this house?”

In truth, there’s no one right answer. If a home already is priced at the lower end of the current market, there may be less flexibility than if it’s priced higher. At the same time, it might be more difficult to get a home seller who has overpriced their home to come down to a reasonable level because they’re often convinced of their property’s inflated value.

Days on market are a less useful indicator than many believe. A high Days on Market count has an equal chance of being indicative of increased motivation (the seller is getting anxious which will lead to desperation) or a lack of motivation (the seller is convinced that “they know what the home is worth”) and isn’t inclined to budge.

What I can tell you is in reviewing my own numbers for this year, my buyers have ended up paying around 95% of sales price on properties ranging from starter homes to near-acre properties in Desert Hills. Add in the seller incentives we’ve been able to negotiate and the net price paid drops to around 94%.

These are the numbers you’re not likely to hear at a cocktail party, though. No one will brag about buying a house for five or six percent below list even if that’s what they really did. What you’ll hear is you shouldn’t offer more than 75 cents on the dollar and that real estate here in Phoenix can be had for pennies on the dollar.

Good stories. Entertaining. But not close to true.

[tags]Phoenix real estate, real estate negotiating[/tags]

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