With so much negativity in the real estate market and the economy in general lately, I have been getting a lot of questions about how “motivated” my sellers are.  I’ve received plenty of “low-ball” offers on my properties, and have in turn, submitted some “low-ball” offers on behalf of my clients. I’m not saying that there isn’t a time to submit a low offer, or that a full price offer is the way to go either. 

My job, as a Nashville real estate agent, is to provide my client with all of the information, so that they can make an educated decision on the value of a home that they would like to purchase, or if they want to sell their Nashville home.   There are several ways real estate agents go about the pricing process, which is the same way that potential homebuyers should come to an educated offer price.

1. First, a CMA or a “Comparative Market Analysis” is a detailed property listing sheet that should be provided by your Realtor.  The CMA lists homes similar in size, age, condition, and features to the subject property have sold in the area recently. Ideally, a six month history is preferred, but going back a year is acceptable. The CMA will tell you:

  • How long the sold properties were on the market
  • What the selling price was and the sold price per square foot
  • The total average sold price per square foot

Based on the information provided in the CMA report, you can then compare your home with the sold homes.  Is the home you’re looking at superior to the comps?  Is it inferior to the comps?  Is it about the same as the comps?  Based on these questions, your price should be adjusted accordingly.

Here are a few tips for buying a home in the current market.

DON’T

  • Believe that the national market is the same as a local market. The market in Nashville is different that Las Vegas or Atlanta.
  • Assume the seller is desperate 
  • Go in with an attitude that the seller is lucky to get any offer
  • Presume every house should be purchased for less than market value in a buyer’s market
  • Use tax records to determine market value.

 DO:

  • Consider days on market to judge how anxious the seller may be
  • Consider time of the year and possible competition.  Sellers may be more motivated in the winter months vs. spring time sellers
  • Study the CMA and detailed property pages
  • Have a strategy for the goal. What price range do you feel comfortable with?
  • Know what your needs are for seller paid closing cost assistance, if any, beforehand from your lender.
  • Think about the degree to which this home is suited to you. How badly do you want it?
  • Remember that the desired closing date and other terms of the contract are important too.
  • Be honest with your Realtor about your limits. If you are holding back because you think your agent won’t work as hard to get you the deal if he/she knows your highest and best offer, then you don’t trust the professional you have hired and need to reconsider or get a new agent to represent you.