Monday, February 17, 2014

How to Make Sure You're Getting a Fair Deal on Real Estate

Negotiating the price of a piece of real estate is not an exact science. Everybody wants to get a fair deal, nobody wants to get ripped off. For example, if you have looked through Waxhaw homes for sale and have settled for a piece of Waxhaw real estate and you're getting ready to make your offer. How exactly do you know that you're getting a fair deal and that you're not offering too much for a piece of real estate property? Here are a few suggestions to start you off:

1. Look up recently sold comparable properties. - This may be a bit tricky because finding comparable properties in the same neighborhood is not always an easy task. It would, however, give you an insight on how much comparable properties got sold for and would give you a clue on how much you should offer. However, relying on this data alone would be quite insufficient. There are other considerations to think of, like how much time these properties had to wait for before they got sold.

2. Check out comparable properties that weren't sold. - Check out properties that are comparable to the property you want to buy and are priced similarly, were put on the market for a while, but were taken off the market because they couldn't be sold. If you can find comparable properties that have been recently taken off the market because they couldn't be sold, chances are they're overpriced.

3. Check out if the property is FSBO. - Properties that are listed as FSBO tend to be cheaper because you don't factor in the commission of real estate agents. Keep this in mind as you look at properties that are comparable to the one that you want to purchase and you want to make price comparisons.

4. Ask your agent's opinion. - There's a misconception that all real estate agents want is to sell you overpriced pieces of real estate. Agents who understand the business know that when past clients find out that they sold an overpriced property to them, they wouldn't recommend the agent to their family and friends anymore. Professional real estate agents rely heavily on referrals. Agents also want you to find a property that you can afford so that they can make a sale. Ask your real estate agent's opinion and keep it in mind when thinking about how much to offer for a piece of property.

5. Have the house appraised. - When you apply for a loan, the lender appraises the value of the house you want to buy. They do this so that they can be sure that if they have to foreclose the house someday, they will recover the money when they sell the house. It's standard procedure. If the appraisal comes back at a much lower price than you originally hoped for, take a second look at the house to check if you're getting a fair price. Chances are, you're not.

If you feel that you want to test the waters, go ahead and make an offer. Don't be afraid to offer below list price, as long as you know the price you're offering can still be considered a fair amount. Chances are, the owner will make a counter offer and the negotiations should proceed from there.