square footages, garages, swimming pool, etc. Then, it compares your potential home to similar houses on the market in your area. This model will give you an idea of the average sold prices, which will be fundamental information. Using the CMA, add or remove the components that respectively increase or decrease the value of your potential home. For example, you could know that the current owners have recently changed all the plumbing in the house. Or, conversely, that the plumbing is 30 years old and may start breaking down. Research the market trends. Has the local market gone up or down over the last few years? Are houses being built that will soon be for sale? For example, teardowns and new construction would indicate rising local home prices. Those calculations and forecasts may take time and effort, but they will ideally leave you with options to consider. Your real estate agent will assist in this process, providing data to help you decide. Working along with your agent, you will determine a price, which your agent will send to the seller’s agent, to present to the seller. The seller may either accept your offer, present a counteroffer or not counter at all if your offer is too low. Negotiations will go back and forth until you reach an agreement. Once you’ve agreed on a price, you will move into the escrow phase.
NEGOTIATING THE PRICE: WHICH TACTICS TO USE
It’s a good idea to know the reasons why the owners are selling the house. Do they want to sell because they’re moving for a new job? Are they moving soon and thus “motivated sellers?” Has the property price been reduced due to extensive time on the market?
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