Once you have zeroed in on a property to buy, one of the topmost concerns is whether you are paying a fair price for it. There are several tried and tested methods for this, and we have listed the most helpful ones to make your buy a smart buy.
Know the prices of recently sold properties
Checking prices of recently sold properties is essential to find the property’s actual worth in the market and compare it with houses of the same sq. ft with almost the same amenities.
Comparing the prices of properties that are closer to the property you are looking for will give you an accurate price range. Real estate agents can also quickly help you with their data to determine if the asking price is a fair deal.
Look for local estate agents for example if the property is in Buckingham then Buckingham letting agents will have the up to date details for recently sold properties and can give information on comparable properties for you to make a better decision about the price of the property you like
Check comparable properties in the market
If you are visiting the property in person, you can take a look at the size and amenities of the properties in the region and come to a conclusive decision on the quoted pricing. The information will help you negotiate better with the seller and help in closing the deal much quickly.
Understand market conditions
Naturally, in the seller’s market, the properties are a tad overpriced, and in the buyers market, the properties are underpriced. By understanding the market conditions and how well the real estate flourishes there, you can reach a fair price agreement between you and the seller.
The factors like mortgage interest rates and the job market on the economy are all decisive factors for property pricing.
Take extra care when dealing with For-Sale-By-Owner-Properties (FSOB)
When you’re dealing with FSOB, always ask for the 2.5%-3% discount as the seller is saving up on the agent’s commission. However, many sellers do not price their property based on this, and as a buyer, you can negotiate with the asking price.
Also, as the property has been priced independently by the seller without a professional valuation, there can be a considerable margin between the market price and the asking price.
When you are moving into a new neighbourhood, look for the positive signs of development projects in the area like roads, malls, schools or colleges.
This will give you an assurance that the real estate market will flourish in the coming years and give your property a higher valuation. You also need to look out for red flags like closing down of shops and grocery stores.
It reflects that the area is not on the path of development and you might need to consider moving and the price of the property.
Hire an estate agent
Seeking professional help is always advised when you tread into uncharted waters. Hiring an estate agent can assure you that you are being quoted a fair price after a lot of market research.
The estate agent can take care of a lot of things associated with the buying and make the process smoother.
Don’t hesitate to negotiate
Sellers usually do not price the property on its exact value as they expect a negotiation. The properties, in this case, are priced higher, and when the buyer quotes a lower price than what is listed, the seller opens up for a negotiation to come to a consensus on gaining a fair price.
There are others who list their property with the lowest price expected to avoid negotiations and to accept buyers who are ready to pay the price quoted. In both cases, as a buyer, it never hurts to quote a price below the listing price to get an idea of the property’s actual worth.
Another thing to keep in mind to avoid making unreal asking prices as it may jeopardise your credibility with the seller, or someone else may easily outbid your asking price.
Get the appraisal done
If you are buying a property on mortgage, the lender will be initiating an appraisal of the home to know its value. The appraisal is carried out by the lender which is paid for by the buyer.
The appraisal helps the lender to understand the property’s value and its appreciation in the coming years. If you stop paying your mortgage, the lender will evaluate if the property will enable him to get a reasonable amount of money back.
If the appraisal falls lower than the asking price, the lender may not provide a mortgage until the price is reduced. Hence, you can be sure if you are getting a fair price for your property by doing an appraisal.
Do a thorough inspection of the house to see if there are any major damages that require immediate repair or may want a repair in the future that may cost you a lot.
You can either ask the seller to rectify them before selling, or you can ask for a discount from the price to do it yourself. By making a careful evaluation of the property, you may avoid unprecedented expenses right after spending a massive amount of money buying the house.
By analysing all the above factors, you can ensure that you are getting a fair price for your dream house!
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