These Simple Tricks Can Keep You From Overpaying When Buying a House
July 8, 2015 | Richard Sites
When buying a house, the question always arises, “What should we offer”? There are a couple of ways to figure the correct answer, so let’s look at the simplest way to make this calculation.
The easiest way to determine what to pay for the house is to ask yourself, “If we don’t get this house, what are our options”? When inventory is low, like it is now, you may not have any other choices to pick from. So don’t let the house get away.
Offer full price with a quick close date. You can never overpay when there are no other options. What?
Think about this: If you are caught in the rain and a man is selling umbrellas, you might pay whatever he was asking since you need the item and he has it. This goes on every rainy day on the streets of New York. Umbrella salesman stand right outside the subway exits and offer them for sale and they have plenty of customers.
The second way to keep from overpaying is to calculate the median price per square foot of recent sales for homes like the one you are considering. I use a concentric pricing model I developed to make sure the price we are offering is what homes like the it are selling for in the last 90 or 120 days (depending on the number of homes we have to work with). The higher the number of homes the more accurate your calculation will be.
But the simplest way to keep from overpaying is this. Homes in Jupiter typically sell for around 93-95% of the listing price, lower on luxury homes. So you should make an offer that is around 10% lower than the list price and figure that after a counter from the seller you will settle in around the 95% mark.
If you would like to have a conversation about Jupiter luxury real estate you can reach me at 561-762-4073. Unlike most agents, I have lived here 25 years and know the market inside and out. And be sure to subscribe to this site for my daily real estate updates and to my You Tube channel where there are over 350 videos on this area.