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Should an East Sacramento Home Buyer Lowball if a Home Needs Work?
If a home for sale in East Sacramento needs work, does that mean a home buyer can or should offer less than the asking price? Imagine this scenario. A home buying couple has been out touring homes with her East Sacramento Realtor for several days. They had been looking at homes in East Sacramento both online and in person, trying to find the home that speaks the loudest and stirs up those emotional longings. Finally, they stumble upon a home with the right number of bedrooms and baths, the layout is perfect, and the location is highly desirable, but, alas, it’s not in the best condition.
The home needs a new roof, and the elderly sellers don’t have the money to replace the roof. The hardwood flooring under the carpeting is in pristine shape but rolling up carpeting to haul off to the city dump is really not in the buyers’ future plans. Perhaps the flooring slants a little bit because the home has been around for 75 years. The hottest design trends that are featured in all of the home remodeling magazines are not found in this home; instead there is basket-weave tile in the bath, which the buyers would prefer to rip out.
Still, there are very few homes for sale in the buyers’ price range in East Sacramento. This home might be perfect in every way except for the defects the buyers noted. How much should the buyers offer if they decide to move forward? That’s always the big question. This could be the home of their dreams.
First, a buyer might want to consider the fact that the home is priced correctly and at market value, which is often the case. The price probably already reflects the work. Perhaps another home the buyers don’t much care for is priced less because it is a home that is much smaller and located on a busy street? Figuring out an offering price does not mean buyers should automatically offer less because the home does not measure up to their ideal needs. Market value does not depend on a buyers’ future home improvement plans.
Buyers, too, might point to the days on market, as the novice typically assumes incorrectly that longer days on market always means a home is overpriced. Sometimes newbie real estate agents make that mistake as well. What longer days on market can also mean is many home buyers do not want to buy a home that requires any work at all, so they pass it by. Not that it’s priced incorrectly. For many first-time home buyers, any amount of work is too much work.
The savvy buyer will instead see an opportunity to buy an East Sacramento home that will increase in value after the right kind of improvements are made. They also welcome the chance to apply a personal touch to their new home and might even spend afternoons strolling the aisles of Home Depot. Often, these types of buyers, believe it or not, are real estate agents. If you want to buy a home like a real estate agent, then you might want to talk with your agent about the comparable sales and look at the sales price the way a professional would. Because only a novice would believe a lowball offer is the right answer.
Raising the Sales Price When a Home is Overpriced is a Bad Idea
Raising the sales price when your home doesn’t sell because it’s priced too high for the market is a screwball strategy that some sellers employ for various unknown reasons. Well, if you ask the seller he might say that a home down the street, for example, was just listed at a higher price, which in his mind would justify the price increase, even though it’s the wrong way to look at it. If anything, an overpriced home down the street will make a reasonably priced home sell faster.
Homes that are for sale in Sacramento are not necessarily homes that are for sale. The list prices of those homes are pretty much meaningless and carries little weight if there are no offers. A sales price is an enticement, like bait on a fishing hook, but there is no guarantee a fish will bite it. Not only that, but it might be a plastic lure disguised as a tasty treat. Not every home that has a for sale sign in the yard is a home that is for sale. That’s where home buyers’ and home sellers’ perceptions can slide sideways.
What matters are the pending sales and the sold comparable sales because those are the homes that real home buyers have purchased. Those prices are indicative of the marketplace. They show what another home is worth.
Then, you’ve got condition. A home in poor condition will not be attractive to many first-time home buyers. Investors in today’s Sacramento real estate market want a good deal, and to the investors I talk with and receive offers from a “good deal” means paying less than market value.
Bottom line is in today’s fall Sacramento real estate market, when you’ve hauled in a big fish and it’s flopping about in the boat, the thing to do is knock it over the head. You don’t throw it back in the water when you plan to eat it. You don’t say you need to catch a bigger fish if it meets minimum catch guidelines. And you don’t raise the sales price because you don’t have any offers.
Give home sellers enough time, and they’ll come to that conclusion on their own. The thing is they generally end up paying for those decisions.
