Budgeting for buying a home can be difficult enough when you're just weighing mortgage options and a purchase price. But there are many other factors that go into the cost of home ownership. Some of
How To Get Offers Accepted In Hot Markets like Katy, TX
Real Real estate markets for resale homes in Katy, TX, have been popular for a long time. 52% of the sold resale homes in the last year were on the market less than 30 days. And, 26% were on the market between 30 and 90 days.
Katy is comprised of what I call “sub-markets”. What I mean by that is that depending on what part of Katy is it, it will have different demographics and market stats. For example, within the City limits of Katy is in zipcode 77493. But, zipcode 77493 outside of the city limits has different market stats.
Market stats refers to data such as price, price per square foot, list price to sales price percentage, and days on market.
As a Realtor, it is my job to keep up with these distinctions and understand the “sub-markets”.
However, when it comes to getting a seller to accept a buyer’s offer, the same strategy applies to each sub-market.
The first question is, “Is subject an average home for the subdivision, or is it less than average or better than average?”
The term “average” is relative. An average home in a subdivision where the average sales price is $250,000 is going to be different than an average home in a subdivision where the average sales price is $500,000. For example, if a home doesn’t have granite countertops, but neither does any other home in the subdivision, then it is average in that aspect of the Upgrade Factor. But, if a home doesn’t have granite countertops in a subdivision where 75% or more of the other homes do have them, then that home would be below average for the aspect of the Upgrade Factor.
Factors that help determine if a home is average for the subdivision are:
Style – Is the elevation (front) typical for the area?
Location/site – Are there any power lines, water tanks, through/busy streets, etc.?
Condition – Has the home been maintained, clean, no heavy wear and tear?
Upgrades – Flooring, appliances, built-ins, countertops, light fixtures, covered deck/patio, etc.
Mechanical components – Are they still within their useful life period, have they been recently replaced (not always evident)
Floorplan – Is it common/popular? Does it flow well? Is master up or down? 2-story living area?
Aesthetic – Is it light and bright or dark? Are the design colors pleasing to most people or too specific/personal?
Most Sellers use the results from the Factors to determine their list price and what they price will accept.
When the Factors are in line with the list price, then an offer will come in quickly. If one of the Factors is off, for example, home needs a new roof, then a Seller can’t expect to get an offer like the home with a new roof received. If a home is on the market longer than average, then the list price and Factors are not in line.
The second questions is, “If you were the seller of the subject property and compared the factors of the sold listings with your property, what price would you honestly expect to accept?”
Okay, so what if a Seller is unrealistic? Then well, the Factors may not even have been a consideration. What a Seller will accept is not always market value as determined by an appraisal. Just because the CMA states that a home is only worth a certain amount, that doesn’t mean a Seller will accept it.
But, that works in the opposite way, too. If the Factors are in line, and the list price is reasonable, Seller have every right to expect reasonable offers. Just because you make an offer, doesn’t mean the Seller has to respond to it if they feel is is well below what they feel they deserve to accept. Unless they are in dire circumstances and are extremely desparate to sell, Sellers aren’t going to give away their hard earned equity just because a Buyer wants a good deal.
There are three types of Buyers:
1) Class Conscious – “Wanna-Be’s”: Those that purchase for status or egos – “I don’t care what it takes, I want it.”
2) “Fair-Minded” Those who are rational and realistic: “I want a fair deal and have done my homework.”
3) Dreamers – UnRealistic – Time-Wasters: Those who want the best deal – “I don’t care what the CMA states, I want to get the best deal I can no matter how far below market value it is.”
Of course, Sellers want Type 1 Buyers. If a mortgage is involved, there’s always an issue of the home not appraising.
Okay, here comes some tough love. Don’t continue reading if you sensitive to the truth.
If you are a Type 3 Buyer, then you really should rethink your reasons for wanting to buy. Be more respectful of other people’s time. Don’t be so self-righteous to think that it’s the Realtor’s fault that your low-ball offer didn’t get responded to or countered by the Seller. Ask yourself what is it about you that you are so more deserving than all other buyers that pay fair market value for their homes. Share this rationale with your Realtor so that he/she can decide if you are the right type of client for them.
Sherry Hamm obtained her Texas Real Estate License in 1999. Sherry is a devoted full time residential Real Estate Professional focusing primarily on Houston's Westside, Katy, Northwest/Southwest Harri....