I have a buyer making an offer on a home listed at $650,000 in Blacklick Ohio. It was built 10 years ago for $687,000. The listing agent has hinted we could probably negotiate a quick deal at $600,000. Looking at comps and homes for sale the home is a good deal under $620,000. At $600,000 it is starting to look like a very good deal. It is not a foreclosure or distressed sale so we are unlikely to get a fire sale price.
Is this a good deal and how does the buyer see it? Be careful to not focus on the wrong facts and draw the wrong conclusions, other wise you will not know a good deal when you see it. For example, homes have dropped in price on average 20% to 30%. If you take the price they paid , $687,000, and knocked off 20% it would be worth $550,000, which is what the buyer would like to pay. The problem is they are adjusting the price from over 10 years ago and just erasing any history in between. For 7 to 8 years prices increased on average 3% or more a year. Before the crash the home was probably worth over $750,000. If you take a 20% price drop on the price it was worth before the crash you end up at $600,000.
When making decisions about value you can not select facts and then view them the way you want to suit your needs. You need to look at all factors and see what the trend is. Looking at facts the wrong way won’t get you a better deal on a home. Actually the opposite. It will cloud your vision and not let you see when you are getting a very good deal. You may even end up walking away from what was a very good buy.