First-time buyers can be excused for being confused when assessing if a property is in their price range.
Your agent will be your guide on this topic. But in the current market, it can be difficult even for experienced professionals to land on the perfect number consistently.
There’s a cocktail of details that needs to be considered. This includes the type of building, land size and the number of bedrooms, bathrooms and vehicle access. Comparisons are then made of similar nearby homes that have been sold recently.
This information is then combined with local market knowledge to arrive at a price range that will determine whether a home is within your reach.
Here are some additional observations to help you better understand the process.
Agent cliché
“Quote it low, see it go. Quote it high, see it die”. It’s an old saying that illustrates the folly of sellers who take extreme positions in pricing their property. Your takeaway is that there’s little to be gained when the seller takes an unreasonable position. Offer what you believe the property is worth and be prepared to walk away if the talk gets crazy.
Market forces
The mood of the market is a significant influence on the outcome. Right now, we’re in a seller’s market as buyers compete keenly for property. When there’s a glut of property and a shortage of buyers, prices head south. While it’s always important to watch for signals that the market may be changing, a better strategy is to know your own game plan and stick to it with a long term view to growing your wealth. Trying to time the market is fraught with difficulty.
Negotiation challenge
Offers can go way beyond anyone’s expectation, which is upsetting if the action whistles past your budget. Work with your agent and ensure the research is done to minimize this experience but understand that it just may be the sign of the strength of the market.
Wrong price
No agent’s guide is gospel. Market moods change in a matter of weeks. If you love the property, then enter a negotiation and see where it takes you. Don’t get hung up on where the selling agent started – it’s the final result you care about. Especially if you can land the deal.