March 21st 2017- Many people are drawn to the American dream of home ownership but they never realize how complex it can be until they get right in the middle of the process. Of course, having an experienced real estate agent to guide you is definitely an advantage. In spite of that, many people believe that low-balling on their first offer on a house is the way to go. After all, who knows? Maybe the owners are so desperate to sell that they’ll accept the low offer.
Though buying a great home at a low price is everyone’s dream, it normally doesn’t work. In many cases, the owners are offended by the offer and won’t even make a counter offer. How sad to see someone lose out on a home they’ve spent months searching for. So what should your first offer on a house be?
This is a question often asked by our clients here at Enterprise Realty Brokers. Though our commission is higher if you pay more, that never influences our decision or advice. As professionals in the home buying business, we want our clients to get a great deal. However, we don’t like to see clients lose out on a house they love just because the offer was presented wrong. Instead, we work together with our clients to help them arrive at a number they feel good about, and a number that’s strong enough to win if there are multiple offers.
If you’ve searched for months to find that perfect house, then it’s definitely our goal to help you get it at the lowest possible price. We arrive at that number by utilizing several helpful resources. This includes years of experience and the helpful insights available from the Multiple Listing Services (MLS). Here, we can quickly discover the average home price in a specific neighborhood. That’s a great way to learn what you can expect to pay for a comparable home in any area.
A long time adage for real estate agents, the location of your home is paramount. Sometimes home values vary greatly when there’s only a mile or so between a prime, highly desired location and a not-so-great location right next to the railroad tracks.
Of course, a lot goes into deciphering those figures. For example, based on data provided by the Midwest Real Estate Data (MRED) service for real estate agents in the Midwest, the closing price of a property in February 2017 was on average 97.1% of the last listing price of the property. With the demand for real estate increasing, this percentage has grown steadily over the years. In comparison, this ratio was lowest in Feb 2012 at 94.1%.
Does that seem confusing? For the average consumer, it is. But that’s why you pay commissions to an experienced broker. It is our job to know what all this means and use the information to your advantage.
Online portals like Trulia and Zillow, as well as the county assessor’s office, provide estimated values of the property or estimated value ranges. Using just one of these resources may not be completely indicative of the property value, but using multiple resources and comparing the results should start to paint a clearer picture.
Another expectation from every real estate agent is the ability to produce a Comparative Market Analysis (CMA). Every real estate agent should be able to produce a good CMA that includes an analysis of past sales in the area. The CMA should include the condition of the home as well, something that online portals and the tax assessor are unable to consider. This is crucial especially for those properties that are in very poor or extremely good condition. While online portals and the county assessor’s office mainly focus on the rules of averages (property condition), CMA can really take into account the condition of the property and the value it adds or subtracts.
Possibly the most important consideration is what the property is worth to you. Being near a good school or your job can cause buyers to pay more for a house. Other factors like these include the desire to be near family or friends, or simply a love for the neighborhood. People will sometimes pay a small premium to get homes like this. And we see nothing wrong with that. The fact is that you will be spending a good amount of your life in the home and your family’s happiness is worth something.
Working with the right real estate agent who can point these things out is very important. Buying a home is not an easy process. It is usually one of life’s biggest investments. To have the best possible experience, it’s essential to work with an agent who cares about your goals.
Enterprise Realty Brokers was founded in 2006 with the simple objective of offering our clients the best real estate services available. We strive to help you locate and buy your dream home at the lowest price. We go the extra mile for each client to help them achieve their real estate goals. We’ve altered the playing field in real estate by focusing on technology and data to deliver the best services and great results to each client.
When you’re ready to sell and buy residential real estate in the areas of Cook, Lake and DuPage County, we hope you’ll give us a call. We have the experience to assist you in every way, giving you the advantage over other home buyers.
By Dan Cuckovic, Managing Broker/Owner, Enterprise Realty Brokers, Inc.