What is a Great Deal when buying a home?
I just got off the phone with a buyer and wanted to share with you a bit of our conversation. This particular buyer is now Under Contract to buy their first home and they are very excited about this property. However, through the negotiation, this buyer was particularly concerned about feeling like they got a ‘deal’ on the house. Well, in fact, the house that they chose was already a very well-priced. And one of the issues we needed to work through, emotionally, for this particular buyer was – how do we define a deal? How do we determine a good price for a house?
Well, I can share with you statistically that in the Triangle area of North Carolina, homes have traditionally sold for 98 to 99 percent of their list price, assuming the house was well priced. And in 2018’s super hot market, homes are frequently selling above the list price and receiving multiple offers. So a historic benchmark we could use would be to say, did we get the negotiated price down to 98 or 99 percent of the list price? And in today’s market we might ask, did we keep the negotiated price within $10-$15K of the listed price!
But here’s what I’m going to suggest instead – the most important factor is, how is that particular house priced compared to the market? If a house is overpriced, 95 percent or 96 percent of list price could still be way too much for that particular house. Conversely, if a home like the one my buyers have Under Contract is already well priced, it could be that a 100 percent of asking price is an excellent price for that house.
So the data that I shared with this particular home buyer analyzed recently-sold, comparable homes, then compared those figures to the price we negotiated for their home. That analysis clearly showed that even at list price the house was already a good deal, and we need focused on the negotiated price vis a vis the market, not the negotiated price vis a vis the list price.
That was a helpful information to her, I hope its helpful to you as well!