Question of the day: How do you, as a home buyer, determine the value of an offer for an Edmonton home?
It’s a burning question that we’d like to answer this Wednesday. Below are some of our two-cent advice on how to determine the best offer for a home.
Okay, let’s start with the things that you should avoid. This process would help set you up to offer the price that’s fair, correct and to your “advantage”.
AVOID AUTOMATED ESTIMATES. Online home assessments have proliferated this past decade. The rise of clever algorithms have given birth to countless to what we call “automated home value estimates”. Using these services is the best and fastest way to---fail.
It’s incredibly inaccurate because the data being pulled by the algo is outdated and there are factors that simply can’t be determined by an automated software.
Algo’s will not replace your real estate agent, so the best way to start is to move away from these things.
TAX ASSESSMENT FALLACY. Just stop if you’re thinking of using tax assessment as the basis of your home offer price. The home’s tax assessment is used to provide an insight on how much the property’s tax is-that’s it, plain and simple.
There are times that an Edmonton home’s value is much higher than its tax assessment and vice-versa.
These two are the most important things you need to avoid.
Now that you know the two most common mistakes that home buyers make when offering a buying price, we go straight on to how to basically do it correctly.
DETERMINE THE CURRENT TREND IN THE MARKET. In real estate, there’s usually three states; neutral market, seller’s market and buyer’s market.
Knowing which market you are in today will give you a leg up on how to price your bid.
Buyer’s market simply means that there is abundant supply of properties and that buyers have the power to determine how much they’re willing to pay.
Seller’s market is quite the opposite. Demand is greater than supply which would mean home sellers have the upper-hand in determining the price an Edmonton home would be selling for.
Neutral market means there’s equilibrium in the market.
When you’re in a seller’s market, the asking price is given more weight that you’re offer price-this will give you an indication that home owners will not play low ball with you.
Buyer’s market is your friend. When you’re in this market, you can lower offer prices to the house of your choice.
WORK WITH YOUR NEIGHBORHOOD SPECIALISTS. Like here in Edmonton, Team Leading Edge is one of the most reliable specialists in the city. Not that we’re tooting our own horn or something. It’s just the truth.
This is the final step for you in determining the most appropriate offer price. Only an agent with back end access to the local Edmonton MLS Listings can give you the previous selling price of a particular home. Event that information would not be enough.
Your neighborhood specialists can and will provide you with a comprehensive COMPARATIVE MARKET ANALYSIS. This would entail collecting various data points, consolidating market reports and computing the average prices of similar homes in the neighborhood. All this work will be given to you for FREE! It should be.
Once the agent of your choice have provided you with the figures, you can now work with him or her in drafting an offer letter for the home seller. Now, you’re just one step away from owning your Edmonton dream home!
Check out Team Leading Edge’s neighborhood specializations. No Algorithms involved, the team does it the correct way.
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