Page 2 - Van Wig & Associates Newsletter, Lakewood Edge ~ January 2020 Issue

home prices
YOUR MONEY

FEWER HOMEBUYERS STUCK PAYING

ABOVE THE ASKING PRICE

by Carla Fried What is the most recent comparable
“…understanding the current sale price? How is the local economy?
or homebuyers and sellers, Where are mortgage rates?
the original list price is the As a buyer, knowing the list-to-
LAKEWOOD Fconversation starter, yet rarely relationship between list price final price ratio is a valuable piece
the final word _ only about 15%
of negotiating intel. If a home is
REAL ESTATE EDGE of homes in the largest metro areas reasonably priced and 5% discounts
sold for the seller’s original asking are common, you might make a first
Publisher price during 2019’s second quarter, and final sale price in your
Allison Van Wig and final offer with that discount. Or
CA DRE #00985700 according to real estate data firm if negotiations typically go another
CoreLogic. market— and in your price round in your area, an offer at a
Discounted sale prices occurred 7% to 8% discount gives the seller
on 61% of homes sold, CoreLogic room to negotiate back toward a 5%
reported, up from 57% in late 2018. range—is key to walking away markdown.
Tight markets subject to bidding A 2015 academic paper suggests
wars and sale prices above the ask, of an intriguing pricing strategy for
4435 E Village Rd course, get the most attention these with a deal you feel good about.”
Long Beach, CA 90808 days. And those conditions continue, sellers. Once you get close to deciding
to varying degrees, in San Francisco. on your list price, avoid lots of zeros
562-882-1581 Seattle, Minneapolis, Denver, Boston, Chicago, Houston, New Orleans and estate markets here: https://www.rate. in the actual list price you settle on. In
Allison@superbroker.com Los Angeles and Washington D.C., Hartford, at least 75% of home sales com/research. an experiment, researchers found that
www.SuperBroker.com according to CoreLogic data. are expected to be at a final price that This is a basic analysis every agent when a list price was precise rather
But sale prices below the list price is below the original list price. The should provide. Recent home sale than rounded (and slightly higher
were common in Miami (80% of sales average discount in those markets is prices for “comparable” nearby homes than the rounded price) it triggered
below list), Chicago and Houston forecast to be about 5%. is an important metric, but a good the least aggressive offers from buyers.
(70%) and other major markets. The cause isn’t a soft market. agent will also provide information For example, if you decide
Buyers and sellers need to be aware of Of the aforementioned areas, only on how that price compares to the $300,000 is the right list price, the
the new reality. Chicago price gains have failed to original list price. research suggests that pricing at a
Another real estate company, keep pace with inflation over the As a seller, your must-have price precise number such as $301,750 will
Knock.com, which helps people buy past year. Some of the markets where needs to be rooted in current market get you a higher offer (and ultimate sale
and sell with bridge financing, expects buyers are enjoying strong negotiating conditions. What you paid for your price) than if you start the negotiation
6425 Busch Blvd., discounts to list price to increase in leverage are also among the best for home, while intensely important to at the round figure of $300,000. Of
Columbus, OH 43229
877.872.3080 2019’s fourth quarter. Two in three first-time homebuyers. you, has absolutely no bearing for course, if you are planning on buying
www.DiscoverPubs.com home sales in the quarter will come in Whether you are a seller setting a buyer. Yet many home sellers are another home, you can use that intel
below the list price, and the average your list price, or a buyer readying victims of their own “anchoring” bias. to your advantage; if the list is a round
Sudoku, Scrabble, Crossword
and articles distributed by discount will be near 4%, Knock a bid, understanding the current You paid X for the house and won’t number, don’t be lulled into making
Tribune News Services and estimates. relationship between list price and sell unless you can get X plus. Or too high an initial offer.
Brandpoint where noted. Knock predicts that more than final sale price in your market— six months ago, your neighbor sold
© Copyright 2020 by 80% of home sales in Miami will and in your price range—is key to for Y so you are determined to get at ©2019 Rate.com News.
Discover Publications, Inc.
All rights reserved. come in under the list price, and the walking away with a deal you feel least Y. In reality, what you will get Distributed by Tribune Content
average discount will be near 6%. In good about. You can follow local real will reflect current market conditions. Agency, LLC
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