Everyone wants a smoking deal but how do you know it's a smoking deal?
As an agent I hear about all sorts of purchases. I continually hear statements like these two examples. Example 1: Someone tells you, "I got the best deal on my home because it was $25,000 below the asking price and the asking price was $100,000 below the original asking price two years ago." Or "I bought a bank owned $20,000 below market." Hearing blanket statements like these would you say that person received a "smoking deal" for that home. Unfortunately the answer is, "it depends". There are so many factors to consider before you can answer that question you have to answer 7 other questions such as:
1. How long was the home sitting on the market?
2. What problems are associated with the home major and minor? How much to repair? Who's repairing?
3. What is the average time on market for the area your home was purchased?
4. What is the average negotiated % off the price that other Realtor negotiated in the same area within the last 6 months?
5. What is the average appreciation and or depreciation for homes similar to your and within 2 miles of your home? What if there is not very much similar data because the home is in a more rural area?
6. What the home well marketed by the Real Estate Agent or by the owner of the property?
7. What about seller paid concessions? If the buyer needed them it comes at a premium.
Once you answer these if all the items pan out then Yes that person received a smoking deal. This also shows you the value of a great buyer's representative real estate agent. Not only will they do all this research but they will make it seamless when you are purchasing. They work with your Mortgage professional, Title Officer, Listing Agent and they keep a barrier between you the Listing Agent/Office and the Seller. In most cases a good real estate agent will end up saving you thousands of dollars over not using one.
In Oregon and many other states the Seller's real estate agent pays for the Buyer's real estate agents commission. It's almost always prenegotiated before the home ever hits the market. Unless you have major real estate experience there is no reason not to use a real estate professional because they are free to buyers and will save you money. Most real estate agents that purchase a home out of their area will use an outside real estate professional.
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