This normally would be the perfect place to reference Dancing With The Stars, but the abuse I receive from my friends after such posts isn’t worth it.
Instead, let’s talk about the World Series of Poker. Watch enough of the ESPN broadcasts and certain patterns appear. When someone leads out to make the first non-compulsory bet, for instance, they most often bet somewhere around three times the amount of that mandatory bet (the big blind.)
Why three times the big blind? Because that seems to be the magic level where anyone without a legitimate hand takes a hike and anyone with a better or equal hand is likely to hang around or raise the betting further. In either case, after that bet you often have a somewhat decent idea where you stand.
There’s a similar standard in the Phoenix real estate market for non-short sale, non-bank owned homes (on bank owned homes, asking price is a good place to start; on a short sale, take out a dartboard – it’s how the listing agent came up with the price in the first place.)
Nothing is black and white, of course, but my clients have had the best success when they offer 10 percent below list price. At that magical level, there seems to be an equal chance of the seller accepting the offer or at least countering at a reasonable level. Push the price lower and the seller’s more likely to dig in their heels, counter higher or reject the offer outright.
So what, you say, there always are other houses. That’s true, but that doesn’t mean those other houses are what you as a buyer are searching for. If all signs tell you that this is the house – and keeping in mind most people know if it’s the right house two steps inside the front door – then the odds of finding an identical replacement house are slim at best.
Not to mention, delay adds variables to the equation – interest rates for those financing, exchange rates for my Canadian readers – and these variables can result in real additional costs down the line.
Again, this starting point isn’t etched in stone by any means. But like the rule of thumb for betting in no-limit hold ’em, experience shows the odds are in your favor if you follow this advice.
[tags]Phoenix real estate[/tags]