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Buying______
Common
Errors | Inspections
& Links | Home Inspector's Top 10
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with a REALTOR® | House Hunting Worksheet
When Buying, Know the Market
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asking prices of most properties that are for sale reflect
present market conditions and recent sale prices of similar
homes in the area. When homeowners price their homes they try to
walk the fine line between getting the highest price and
ensuring the asking price is competitive enough to attract
serious offers. While most Selling Agents advise their clients
to realistically price their homes in order to attract
acceptable offers within a reasonable period of time, some
properties may not be properly priced and you should know this
before making an offer.
Before making an offer to purchase a home, you should ask
yourself the following questions:
- What have similar properties sold for in the immediate
area?
- How long were they on the market?
- How does this one compare?
- Is it over-priced, under-priced, or fair value?
- What type of market is it - is it a Seller's, Buyer's or a
Balanced market?
By having this information at your fingertips you will be in
position to negotiate the best price and take advantage of any
opportunities that may show up. This is where the experience and
knowledge of a good REALTOR is invaluable. REALTORS spend a lot
of time and energy making sure they know their local market
inside and out. They keep their finger on the pulse of the
market and have the resources, connections and ability to keep
you up-to-date with its constant changes. They know all of the
properties currently for sale in your area and are literally
your best resource for finding the perfect home.
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main factors that affect market value are... |
Location:
- availability of community amenities, such as public
transportation, parks, stores, churches and schools
- quality and consistency of neighborhood planning
- future development plans and local zoning
Property:
- style, layout, size, age and quality of construction of
the building
- size, shape, privacy and landscaping of the yard
Condition of the Home:
- first appearances
- floor layout
- quality and appearance of fixtures
- general overall condition of main systems (roof, furnace,
electrical system, central air, etc.)
Comparable Properties:
Market Conditions and the Economy:
- number of homes currently on the market
- number of people looking to buy
- the state of the local and national economy
- current mortgage rates
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| Market
Conditions: |
No
matter the condition or desirability of a property, its value
will be affected by current market conditions. Here are the
various conditions you may encounter and how they will affect
you:
- Balanced Market:
The number of homes on the market is equal to the number of
buyers (supply equals demand). In this market, prices are
stable and homes sell within a reasonable period of time. It
is a calm atmosphere with Buyers having a satisfactory
number of homes from which to choose.
- Seller's Market:
The number of Buyers exceeds the number of homes on the
market (demand greater than supply). In this market prices
are increasing and homes tend to sell quickly. As a Buyer
you will probably have less negotiating room and may
experience competing offers when trying to purchase your
home.
- Buyer's Market:
The supply of homes exceeds the number of Buyers (supply
greater than demand). In this scenario prices tend to drop
and the properties stay on the market longer. As a Buyer you
will have more selection and less competition and thus be
better able to negotiate a good deal.
In Summary:
When you understand current market conditions, you are better
able to position yourself as a Buyer. It helps to know if you
are in a Seller's, Buyer's or balanced market when deciding what
price to offer. In a Seller's market, there is little selection
and you may have to make a full-price (or even higher) offer if
the home is properly priced in order beat the competition. In a
Buyer's market, you have a lot more selection and plenty of room
to negotiate. In a balanced market you will find a good
selection of homes for sale and have a reasonable amount of time
to decide on a home and negotiate the price.
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One Hovchild
Plaza - 4000 Route 66, Tinton Falls, NJ 07753
Phone: (732) 918-1340 - General Fax: (732) 918-1906 - MLS
Fax: (732) 918-0716
www.MOMLS.com, The Home for Monmouth/Ocean Real Estate.
Copyright © 2002 Monmouth County Association of REALTORS®
and RJR
Solutions, Inc.
All rights reserved.
Information herein is deemed reliable but not guaranteed.
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