Everyone wants a deal. Right? I hear it often. Heck, I get it and I’ve purchased homes when I considered them a “deal.” Sometimes, though, people get so wrapped up in “making a deal” and hammering a seller on a price, that they end up paying more for a home than necessary, because they lost several properties that they low-balled. Eventually they realize that paying asking price ( or more! ) can be a “deal”, even if you weren’t able to work your magic negotiating skills to squeeze someone for every last nickel.
I’ve seen this happen a lot, and I never really thought it would make sense to write about it, because the tone of the article can be hard to explain. The last thing I am trying to do is to say that there is no negotiating needed when buying or selling a home. The reality is, knowing the market and knowing market conditions is a BIG part of knowing what and how to negotiate when buying or selling real estate. I’m just going to talk about a few examples and try to let people know why it is important to work with a REALTOR who looks out for your best interest.
For many people, it is hard to take advice when buying or selling. For others, that is exactly what they want. They want direction, they want someone with experience who will help guide them through the process.
Here’s an example that comes up a lot this time of year as people begin to try to find housing for their student at ASU. They call from a state where the market is completely different than it is here in Tempe, and they want a 3 bedroom home for Johnnie or Suzie with a garage in a really nice neighborhood for under $150,000. They saw one on Zillow, and they want to see some properties over the next few days while they will be in town. Here’s the problem: You won’t need a few days, you probably won’t need more than an hour, because IF a home like that came on the market near ASU, it would be sold way before your head stopped spinning. Yes, really.
A textbook example happened recently. A guy wants a “nice gated community” for his daughter to live near campus. His budget began at $200,000. Um, that’s tough, because he also doesn’t want to “pay too much” for the monthly maintenance fees. I showed him some gated places like North Shore, Regatta Pointe and then over at Villagio. North Shore was “perfect” but the HOA fees are “too high” for him, Regatta Pointe also fit their criteria but only had one floor plan in his price range, so we’ll have to keep watching for new ones to become available, and Villagio is “kind of far” from campus. BUT, he just wants a deal. After looking, I mentioned a condo that we will be listing next week for $120,000 at Rural and Broadway. I happen to believe that this price point is VERY attractive for being so close to campus, and I believe the home will sell rather quickly. This one is not gated, but it is close to campus, so he thought he would like to see it. Without ever asking about what had recently sold in the complex, and without knowing what was for sale in the area, he mentioned that the home would need about $10k in repairs and that he would pay $110k for the home. OK, great. Interestingly enough, the home wasn’t as “nice” as his wife wants for their daughter, so we will need to continue to search for them. My point here is the fact that the property could easily be worth the $120k the seller will be asking, but his “deal making” mentality never would have even put him in the game.
Another recent example is a buyer that a colleague of ours is working with out in Sun Lakes. An older retired gentleman hasn’t purchased a home for decades, but he is absolutely certain that you never offer more that $10k less than the list price. Even in a tight market. Even with little to no inventory. So far, he has lost out on two homes and now the minimum price in the area is…$15,000 more than his self proclaimed sweet spot. Hopefully, his “deal making” skills get sharpened before his lease runs out…
Thankfully, the majority of our clients allow us to help them make decisions based on current inventory levels and current pricing and market conditions. Real estate is a fun business. Especially when you are working with people who understand how to play the game well…