Price Reflects Present Value of Home
Home prices are always negotiable - especially in a Buyer's Market. A better question is "What Price Reflects the Present Value of This House?" Finding the answer to this question helps home buyers determine what price to offer for the house.
The list price is the seller's view of what the property is worth. Prospective buyers have their own views. If seller and buyer agree, fine. If not, they can continue talking - negotiating - until they agree on a dollar value that satisfies both parties.
Let's talk about what home "value" means. The value of a house depends on your perspective. To a seller who calls the house "home," the value may be measured by memories, neighbors, time and money spent on improvements. To a buyer who intends to live there, a house always is measured by its potential: What will it take to make this shell my home?
To determine the "right" sales price, whether you are a home seller or buyer, value must always be considered in the context of the neighborhood, other homes for sale, and general market conditions. The assistance of an experienced and dedicated Realtor can help you gather the information you need, saving you valuable time and money.
Here are some of the factors that contribute to the sales price of a house:
Who Is the Seller? There are three types of sellers: Private individuals who have sufficient equity in the house to pay off the mortgage at the close of escrow consider offers and choose which one to accept. In "Short Sale" situations, the seller does not have enough equity to pay off the loan, thus the name. The seller can choose which offer to accept, but the lender must also agree to accept less than owed. The third kind of seller is lenders who have foreclosed on property.
The Seller's Motivation: A motivated seller is ready to move on. Not every seller is. The typical Ready Seller has done some preliminary research on local market conditions, retains the services of an experienced Realtor to provide detailed information and a plan to market the home to get the attention of potential buyers, prices the home realistically, prepares the house for showings, and knows some negotiation may be necessary.
Sellers with sufficient equity to pay off the loan often are motivated by a need or desire to move to a different area, perhaps because of a job transfer. If sellers don't have sufficient equity, and cannot continue making payments on the loan, their motivation may be to salvage as much of their credit rating as possible by selling the property before losing it to foreclosure. Lenders who have foreclosed on properties are motivated by a desire to get rid of a problem property that has stopped being an asset and is now a liability
Your Motivation: Are you ready for the responsibilities of home ownership? Have you prepared by getting pre-approved for a home loan? How soon do you need to move into your next home? Does this particular house meet your needs and have the features most important to you?
Existing Structure and Property Details: Compare the property to similar ones. What were the recent sales prices of homes similar in size, location, age, and condition? Compare the number of bedrooms and baths. Is there a bonus/family room, separate dining room, den? Is the laundry facilities indoors or in the garage? Is there a pool and/or spa? How large is the house (square feet)? How large is the lot?
Relationship to the Neighborhood: Whether it is a "good" neighborhood is a question only you can answer, based on your own perception. Take a stroll around the neighborhood and chat with people you see. Here are some questions to get you thinking: Is the house on a corner lot, or between neighboring homes? In a cul-de-sac? On a busy street? In a gated community? Are other houses in the neighborhood well maintained, or run-down? Are they similar in size, architecture, age? How many homes in the neighborhood are currently for sale? Where do the children go to school? Is there a large number of rented homes?
The City Around the Neighborhood: The policies of city government affect the value of homes within its borders, and within any city are areas that home buyers prefer because of the "character" of the neighborhood and - important whether or not you have children - because of the quality of the schools. Crime statistics are another way you can compare neighborhoods. Get them from the local police department or online through my website, www.ilajosephs.com.
If you are ready to buy in the Inland Empire cities of Chino, Claremont, Fontana, La Verne, Montclair, Ontario, Pomona, Rancho Cucamonga or Upland, I will be happy to help find your next home. Call me directly at (909) 261-3541 or send an e-mail to ila@ilajosephs.com.
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