As valuable an investment as a home may be, no one wants to be taken to the cleaners. You do not want to end up paying way too much for a house that just isn’t worth the asking price. But, you do not want to underbid and lose out on the deal entirely either. So, what is a prudent and shrewd property investor such as yourself to do?
The answer lies in thorough research beforehand. There is no other way. You simply must find out all you can about the property, the seller, the estate agent on the deal and the general financial standing of the neighbourhood in which the house stands. With this information, you can, at the very least, make an educated guess as to how much the house should be worth and decide whether or not you are paying too much. Here is what you need to do:
Take the time to learn the local market
The only way to keep from being taken advantage of in this kind of market is to educate yourself. Take the time to learn all you can about the local market. See the different types of houses available, the different type of neighbourhoods and the different types of seller, estate agents as well as buyers. Once you get a general feel of how much a certain type of property should sell for in a certain type of neighbourhood, you will be more difficult to swindle.
What have similar properties sold for in the past?
You need to find out how much similar properties have sold for in the past. We are talking about the recent past…6 months or so. With the internet and social media, this information is not that difficult to come by. You can also check to see if there are similar properties currently in the market and how much the sellers are asking for at that very moment.
Cut down the asking price by 10%
A rule of thumb in the property market is to assume that sellers have marked up their asking price by 10%. What this means is that they would be willing to accept 10% less and if you are just offering the asking price then chances are that you are paying too much. However, you need to be careful when using this tactic. If the seller has already reduced the asking price, then offering 10% less of that might be pushing them too far.
Talk to competing estate agents
These are the people who will readily dish out any dirt on a property just to try and get you to focus on buying what they have on the market. Although, some of the information they give you about a certain home might be out of pure malice, there is always something you can learn from what they say. Talk to them about the pricing, the faults and the necessary repairs and so on.
These are simple ways through which you can successfully estimate how much a home is really worth. At the end of the day really, it comes down to how well you relate to the seller and how attractively you package your offer.Tags: how to know what to bid for a property, how to know what to offer to the seller, how to negotiate on property prices