How Much to Offer a Seller?
Never Just about Square Footage!
As a Buyers agent many times over the past twenty years. One of the common questions that comes up is " How Much Should We Offer". The Common answer is to figure out what the particular condo is worth. There are a lot of ingredents that go inot figuring out what the condo is worth.
1. It is easy to look up what the seller paid for the unit and what upgrades were made to the unit since the purchase. If purchased in the last two to three years we can put an appreciation number on their price. Going back further gets too hard. But knowing the price the seller paid does mean something. Can they walk away with cash?
2. We look up the recent sales in the complex where we are going to make an offer. This is the same thing an appraiser is going to do. Getting like units is the important thing when trying to get comparables. Views, Updates, Windows, Parking, mechanical upgrades, all wood floors, high ceilings, floorplans are all important factors in determining the value of a unit. Having see a awful lot of condos it is easier for me to compare all these factors into a value.
3. The biggest mistakes some listing agents make is to determine the value by going by the square footage of the unit. The sellers like to get these high numbers but they are not always correct. There is much more than the size to determine the value of a particular unit.
4. How long has the unit been on the market and how many times has it been reduced. Starting too high is a big negative for a seller as it does not show value which is what buyers want to see. We look those numbers up.
5. Knowing the current price trends is also important. Are prices steady, going up or down. Is this complex being improved over the last couple of years?
6. Many time certain agents overprice their properties. The buyers agents often know that they do this. They do this because of inexperience or they cannot convince the seller to start at the right pricing.
Once we review all the pluses and minuses on a particular condo we can come up with a value. Comparing it to like condos is very important. Using condos in the same complex is the right way to go.
An appraiser is going to use units in other complexes because they have to use sales in the last six months as comparables. My experience "It is extremely rare to have the condo not appraise" It has never happened to be in the last 15 years on my listings or sales. Like 200 appraisals coming in correctly.