5 Reasons Why Those Big Asking Prices are Actually Accurate
No one wants to spend an arm and a leg when they make a purchase. That is no different when looking at buying a house. The asking prices on houses can vary drastically enough to make any home buyer’s head spin.
Even though some asking prices just seem outrageous, if the homeowner has done her homework, the price is probably accurate. There are many factors that go into deciding what a home’s asking price should be and a home buyer should know them before making an offer.
Current Market Prices
The real estate market is always changing. Buyers who start to look at houses and take a break for months often have old prices in mind. This can make them turn up their noses at the sight of what they think are high asking prices.
Depending on the house sales in the area and how many homes are selling the asking price of houses may rise or fall within a matter of months.
Location is More Than Neighborhood
When considering the location of a house it goes beyond thinking about the neighborhood. Even similar homes in the same neighborhood can have a vastly different asking price.
Some homes are closer to busier roads, others have better access to parks or schools, and some have the luxury of have a great view of a certain landscape. Every small amenity in the area can make the value of the home increase and decrease.
Comparable Homes
A homeowner and their agent will use comparable homes – or “comps” – to determine the asking price of a house. This is a tricky process because these comparable homes have to be as close to the listing as possible. Plus, the homes have to be already off the market and a sale that has recently been completed.
Anything over six months old is considered an old sale and should not be used as a comp when pricing.
The Layout Of The Home
There are plenty of older homes on the market. However, these older homes often sell for less because they are less desirable to many buyers. Buyers’ tastes have changed over the years and new constructions cater to these new demands. To appeal to new buyers, homeowners often renovate the inside of their home to offer newer appliances and an open floor plan.
Renovations and Repairs
Repairs and renovations make a world of difference in the price of a home. An older home that is completely updated and renovated may have a higher price tag than a newer home that is in terrible condition. Depending on the homeowner they may choose to sell a property without renovations and leave the asking price at a lower amount. Others will want to renovate to get the maximum profit on the house possible.
Every action a homeowner takes to make their house presentable for a buyer can affect the asking prices of homes. The neighborhood, the comparable homes, and even the layout of the home will change the price of the house. The real estate market is always changing and a buyer has to follow these changes to know if an asking price is reasonable.