Best price/buying smart
Determining the best purchase price can be a real balancing act and much trickier than it appears. In reality, the best purchase price is the price that secures the property.
A smart purchase is the result of understanding not only the current market, but also the market direction. That is the best way to avoid either over-paying or under-paying. How does one under-pay? Many times the lowest price will lose the property for you — either because it alienates the seller or because better offers from the competition will win. In fact, many times the best purchase price is above the asking price, because that will be the only one that gets a buyer the house.
So how do I help my buyers to understand what the best price is?
- First, it is imperative to educate the buyer on the market trend — whether it’s a buyers market or a sellers market, what the absorption rate is, and a hyper-local analysis of the geographic market and house pricing tier — and to explain how this data will impact their pricing position when formulating an offer to purchase.
- Second, I provide a market study of the property of interest, in order to take a solid look at both the specific property and the neighborhood it is in.
- Third, we need to uncover the buyers “competitive position” in order to determine the most effective strategy to help the buyer secure the property with minimal risk.
- Finally, we strategically construct a purchase offer by balancing offer price with fair market value of the property.
This all means having the appropriate market knowledge along with professional guidance to secure the home at the best purchase price, never over-paying or losing by under-bidding.