Buying at the Right Price - Principle of Change

No matter the offering price that the home owner has chosen, the right price for you (the buyer) is what you are prepared to pay and the owner is prepared to accept. How do you get to that price? There are several principle of value that consciously or sub-consciously play in arriving at the price. Here is one of the Principles.

The Principle of Change says that a value today is valid only for today. There are social and economic forces in constant change that impact the real estate market. All we have to do is look at the current economic situation to know that an economic downturn is changing the value of houses.

The right price for a home is the price today. It is not a legitimate comment to say that you could have paid more (or less) for the house today based on what happens to the economy tomorrow. Who has the crystal ball? Today’s price IS today’s value for a specific house.

Photo credit: price reduced @ http://www.flickr.com/photos/thetruthabout/2680694601/

Valerie Zinger ~ Ottawa, Canada ~ T. 613-723-5300 ~ E. vzinger@royallepage.ca

Zingers #22 - Is this a lemon?

When selling your house put out a big bowl of lemons or a big bowl of apples. Fruit lasts longer than flowers but still gives an organic impact. After the sale…

If your sale has handed you a big bowl of lemons, make lemonade.

Sometimes it is not about real estate (3)

What do you get from a pampered cow?

Spoiled MIlk

Photo credit: A cow @ http://www.flickr.com/photos/fantasticalmonkey/231718162/sizes/m/

12 Seller Motivations - Some you will never hear

When buying a home, you will want to know why the seller has put his or her home on the market. Is there something wrong with the house and how motivated are the sellers to accept an offer. What is their level of urgency? The seller’s reasons may also impact the negotiated possession date. This is all part of the purchasing process. In most cases, the real motivation for both buying and selling will not be revealed. Here is a look at some reasons why sellers are selling: You are unlikely to hear some of these reasons (*) as they would seriously lessen the bargaining position of the seller.

The market looks great. It is time to sell.
I hate this house. Let’s move. (*)
My family is growing, I need a bigger house.
My partner is leaving and we need the money out of the house to “move on”. (*)
This house is too big. I need something smaller.
This house has too many things to fix. Let’s move and not have fix them. (*)
Something horrible happened in this house. Get out now. (*)
My company has moved me and I need to sell in order to buy in the new city.
I can no longer afford this house - I need out. (*)
I am not getting along with the neighbours. It is too tense living in the house. (*)
I bought my next house and now have to get this one sold. (*)
I need to be in a different school division for my children’s special needs.

As you can see, there are a myriad of reasons for moving but only some reasons will be revealed. When you are buying, remember that the seller, through his or her agent, is going to put the best spin on his/her leaving the home. Do not expect full disclosure on a seller’s reasons for selling.

In negotations, he who cares least wins.

Valerie Zinger ~ Ottawa, Canada ~ T. 613-723-5300 ~ E. vzinger@royallepage.ca

Zingers #21 - Shed the Clutter

Buyers will look in your shed. Before selling, declutter your shed. This is not a place to hide your excess stuff. Don’t think of taking the shed with you as it is too much trouble and not likely to make the trip. It is part of the real estate you are selling.

Appeal to the gardening crowd with a Home and Gardens Magazine shed.

Buying at the Right Price - Principle of Supply and Demand

The Principle of Supply and Demand says that the value is likely to increase on a home if there are few homes available on the market and many buyers. This is also known as having a Sellers’ Market - competition will exist to buy the home. Conversely, if there are many homes and few buyers, the price is likely to be lower on that same home. This is a Buyers’ Market.

What does this mean? If you are looking at a new development and many houses have been built in anticipation of buyers but few buyers are looking, then the price is likely to be lower than if there were more buyers than houses available. If everyone wants to move to the Glebe and only a few homes become available each year, then those homes are going to be eagerly sought and more valuable than if there were hundreds of homes available each year.

Market forces are always at work.

Photo credit: daytona housing development @ http://www.flickr.com/photos/ghostdad/2544951417/

12 House Buyer Motivations - Some you will never hear

If you are selling you home, you will want to know how motivated a buyer is to obtain your property. Knowing the buyer’s motivation would help you determine how much you can push on your asking price and if you can expect to get even more than this. Here are some buyer motivations:

Prices are dropping. It is time to buy.
This specific house is a steal. We have to buy it.
We need a bigger house. Our family is growing.
We are getting married and, with the two incomes, we can afford a house.
My current house is too big. I need this smaller house.
This house is in excellent shape. Let’s buy it and not have to worry about renovations.
This house has wonderful feng shui. I love it. Let’s get it.
My company has moved me and I need to buy in this new city.
I can afford to live in this neighbourhood.
I know the people/grew up in the neighbourhood and want to move into this area.
I sold my house and urgently need a place to live.
I need to be in this school division for my children’s special needs.

You might never know the real reason but you can get clues from what the buyer agent tells you and from the type of offer / counter offers that you receive on your home. If the buyer loves your home, then there will be flexibility and likely a good first offer. If the buyer will take your home as “good enough” or as one out of two or three equally desirable choices, then the offer / counter offers is likely to reflect this.

Your most difficult buyer is lukewarm to the house and fence sitting between properties.

Photo credit: Sitting on the fence @ http://www.flickr.com/photos/foxypar4/419947468/

Sometimes it is not about real estate (2)

What do prisoners use to call each other?

Cell Phones

Photo credit: Cell phone madness @http://www.flickr.com/photos/adrianblack/1225514850/

Four Rs of Residential Real Estate

1. Remuneration - Buying or selling a home involves payments for the house, the realtor, the movers and all other service providers such as building inspectors, lawyers and insurance people.

2. Research - Not many people buy the first house they see. A lot of time is spent by buyers and sellers in researching locations, current market conditions, community services (schools, playgrounds, shopping) and comparable properties.

3. Respect - When entering into a business transaction, such as buying and selling a home, respect for and from all parties eases the process of making a deal. It remove negative feelings from becoming part of the procedure.

4. Reality - No matter how valuable we think our homes are, the market determines the value. The reality is that we can not always set the final price and the timing of a sale. The market will speak louder than the property owner. The other reality is that we cannot always find our dream home and that some concessions will likely be made in the purchase of a home.

READER RESPONSE: I welcome any of your contributions to the “Rs” of residential real estate.

Valerie Zinger ~ Ottawa, Ontario ~ Ph. 613-723-5300 ~ Email vzinger@royallepage.ca