Knowing how much to pay for a home can be tricky business.  Homes in [Profile.market2] tend to vary in prices from low to high.  Even houses right next to one another can vary in price by as much as 20%.  How can you tell if you’re paying a good price for a home in [Profile.market2]?  In this article, we’ll cover how to determine the value of your home, strategies for making an offer and considerations with the seller that may affect your purchase price.  Whether you are purchasing a foreclosure, REO or bank owned property, these strategies will work for you albeit a little differently.  This is why hiring a Realtor, which costs you nothing, is the best advise anyone can give you.

How to Determine the Value of Your House

The most popular way to determine the value of your home is through what’s called a “Competitive Market Analysis.” This is where you find a ballpark value for how much houses like the one you’re considering have sold for in your area. After you get this, you then adjust your selling price based on other amenities, needs for improvements, etc. that your house may need.  In other words, you try to determine whether your home is average, below average or above average and put a price on it.  If you work with a real estate agent in [Profile.market2] and I strongly suggest that you do, they will do this research for you.  Otherwise, you can do your research online using a variety of websites that provide data on recently sold houses.

Another way to determine a home's value is to hire a real estate appraiser.  While this can give you a very good, professional estimate of what the house is worth, it will cost you around $250.  If might just re-affirm your thoughts anyway but if the appraisal comes in higher that you thought, you might have to raise your offer to get your contract accepted.

Strategies for Making an Offer

There are several common strategies for making an offer on a home.  One common strategy used by investors (that can be applied for residential buyers as well) is to calculate how much they want to pay monthly and work backwards to the selling price.  For example, if you’re willing to pay $2000 a month, you’ll use an online calculator to find out how much you can afford to pay for a home.  This ensures investors stay cashflow positive and can help you figure out how much to pay for a home based on how much you’re willing to spend monthly.  Another common strategy for making an offer is to use necessary improvements as a bargaining chip.  If you’ll need to spend money on the house before you can live in it or rent it out, make it clear to the seller.  Finally, keep this in mind when making your offer: Don’t adjust your offer just because you’re in a “bidding war.”  One school of thought is determine how much the home is worth, what you’re willing to pay and stick to that number.  This might be good in theory but you have to rationally determine why you want the house.  If everything is perfect and you can't see living anywhere else then this is worth a premium to you.  In addition, if you feel that there is some reason that you expect the homes in this area to appreciate in price rapidly, then this is also worth a premium.

Seller Considerations

Although the value of a house is static, the perceived value of a house is not.  If the seller is very motivated to sell for one reason or another, you may be able to get a better price by offering to close quickly.  Likewise, if the house has been on the market for some time already, they’re more likely to be willing to negotiate a lower price.  Motivated sellers in [Profile.market2] come up more often that you may realize.  Figure out why your seller is selling the house and you may have a great bargain on your hands.

Now that you’ve learned these three strategies, you know a great deal about finding a great price for a home in [Profile.market2].   A great way to further your education on how to get a great price on a great home is to speak with someone who is knowledge about the market in the area that you are interested in.  If you’re curious about learning more, please don’t hesitate to contact me by phone at [Profile.cell_phone] or email at [Profile.email_link].  For everthing Cape Coral real estate, visit the most comprehensive websites at www.livingincapecoralnow.com and www.dancraddock.com.

Have a Prosperous Day!