Posted by Ron Wilstein on Tuesday, December 17th, 2013 at 1:09pm.
Today’s buyer is challenged with trying to purchase a property in a limited inventory marketplace. You don’t want to pay too much, but you also don’t want to offer too little and miss out as another buyer pays a little more and walks away with the property you wanted. These five important steps will guide you through the process so you get the property you want.
1. SHOP ON-LINE OR IN PERSON
94% of all buyers begin their search for Park City properties on the Internet. You can get a lot of information online and more buyers than ever are comfortable purchasing a property without ever seeing it in person. Most however, do walk the property before writing an offer on it. The important thing is to not only look for the right property but pay attention to all the properties you browsed, as they will help you determine a fair price to pay for the one you want to own.
2. COMPARABLE MARKET ANALYSIS
Once you find the property you want to buy you’ll want to determine a fair price for it. We help our buyer clients decide the correct price for a property by providing them with information on comparable properties sold within the past six months. We also take into account the remaining inventory of similar properties for sale as they represent competition that sellers need to consider as they evaluate the offers we present for our clients.
3. ABSORPTION RATE
Knowing how fast similar properties take to sell will help buyers determine the correct negotiation strategy to use along with the correct offer price. Ask me about my recent article, “What’s So Important About Absorption Rate?”
4. EVALUATE THE INVENTORY OF ACCEPTABLE PROPERTY CHOICES
When shopping for a property keep track of how many properties overall meet your criteria and, of course, which ones make your short list of selections that you would consider buying. There may be a handful of acceptable properties that work for you, or only one. If there is only one property for you, you’ll want to offer the seller a price very close to or at the list price.
On the other hand, if there are several good properties acceptable to you, you can offer the seller a lower price. A seller in that situation is competing against other properties. If they’re not willing to meet you at your price, some other seller may and they’ll miss out on the sale.
5. DAYS ON THE MARKET
Finally, consider the length of time a property has been on the market. This may tell you something about the property owner’s disposition toward selling. If a property has been on the market for a long time (longer than the average time to sell similar properties) this may signal that the seller is not very motivated to sell the property. If the owner has not reduced the list price over an extended period of time it suggests that he/she is willing to wait for a buyer to come along who will pay his or her desired price.
On the other hand, if the owner has reduced the list price numerous times it suggests that he or she wants the property sold soon. If a property has only been on the market a limited time (less than a month), the owner will probably not come off the list price very much upon receiving an offer. Of course, if the property is competitively priced it will likely sell quickly to the first buyer who steps up and pays the owner’s price.
SPECIAL “BUYER ALERT” WEBINAR
We have prepared a special webinar to explain these five steps in greater detail and the psychology behind each. It is entitled Five Important Steps to Buy a Park City Property at the Right Price.
Contact me at 1-800-585-0151 or Ron@TheWilsteinTeam.com with all of your Park City and Deer Valley real estate needs.