How will you price your offer?
First of all, ignore the listing price
Agents who can't make the right sound because they are noticing buyers when setting offer prices, hang around with buyers because they neglect market analysis, or even deceive buyers by inflating the price are not qualified agents. If the agent spoils the job in this part, wouldn't it be useless to do everything else well?
Strategic bargaining prices based on accurate market analysis! This is one of the biggest reasons to meet a talented and honest agent. Offer prices that can't be used too much and can't be used too low, we will help you decide by going through the following 5 steps. It is not a theory, but it is thoroughly applied in practice without a single exception.
You can't write too much, you can't write too little... There are other offers, but I can't believe the listing agent literally, and I can't even believe my agent's words... It is very difficult to set the price of an offer.
When the offer is pushed, they are disappointed and regret not being bolder. However, even if the offer is accepted, it is a problem. Even though it is the house I wanted to buy, there are often buyers whose faces are hardened rather than like them. Didn't I write too much more than necessary, I was deceived when there were other offers, a house where no one touched me, I guess I beat the drum by myself... etc. That's where the infamous Buyer's Regret started.
The only way to avoid such anxiety and trial and error is to have the buyers themselves “convinced” about the offer price. And the only way to have such “confidence” is to apply the principles below. If you invest 3 minutes and read it, you may be able to avoid the troubles of 3 days.
Five Steps to Pricing Offers
Step #1: For now, ignore the listing price.
Since the listing price may not be fair, ignore the listing price for the first time. It can be influenced by the listing price, resulting in an irrational price.
Step #2: Set an objective price.
It is to predict what offers buyers will put in this house. I get a sense based on the memories of the houses I have seen and the data organized by the real estate agent.
Due to the nature of the real estate market, it is not easy to pull out an accurate market price. Usually, you have to set up a strategy within the "range" that you'll be selling for how long and how long. It should be viewed as objectively as possible, but that is not easy. In fact, this step should be almost entirely concealed by the real estate agent.
Step #3: Now I set a subjective price for how much the house is for me.
Throwing away all the complicated thoughts, ask yourself the following questions: “How much is this house worth to me?” And I set the best price that I can afford to buy this house.
Rather than whether or not there are other offers, the conclusions made at this stage should be the basis for all decisions. This decision is by no means easy. For example, this house is worth 830,000 dollars for me. It's okay though. The process of contemplating itself is important, and if you think about it, the scope will be much narrower than when it was vague at first.
If the best price I can give you is much lower than the objective market price captured in the second stage, it is because it is a house that you can not stop buying anyway. In that case, in most cases, the deal won't close. On the contrary, when you are really desperate enough to say that it should be this house, there may be cases where the buyer is willing to give a little more than the objective price.
Step #4: Develop an appropriate strategy according to the situation and set the offer price.
The older the house is on the market, the lower the best price set in Step #3.
When sellers need to sell quickly or seem uncompetitive, they can afford to spend less than the best price set in step #3.
If the seller doesn't have to sell quickly, or if it looks like there's a lot of competition, use the best price set in step #3 or something close to it.
It is not wise to spend too low a price on the idea that it is the main battle. Usually, if you go out hard on one side, you often come out hard on the other side. It can only lead to unnecessary emotional fights.
I also remember that there are often cases where there are no offers for a month or two, but more than one offer is crowded at once. (Really, there are too many cases like this.)
During a bargain with a seller, whenever your thoughts get complicated, go back to step #3 and get your focus.
When the listing price is severely overprice, it may be a long-term situation or a situation where you have to give up altogether. Sellers' stubbornness is often helpless.
Step #5: Do your best to the end and accept any outcome without regret.
When the contract is concluded, if you have any doubts about whether you have written too much, go back to step #3 and make up your mind. Remember that the goal is to buy a good house at a good price, and it doesn't matter if there were other offers or not (we can't know exactly if there was or wasn't).
Copyright 2021 Boston Choi All rights reserved.