Home Buying Tip – How Much Does a House Really Cost?

Part of the home buying process is determining how much a house costs and making an appropriate offer. Let’s say that you’re in the market for Lubbock real estate. As you go through Lubbock homes for sale, you’ll have a feel of how much certain kinds of houses in certain areas cost. Some people make the mistake of offering a standard percentage lower than the listing price of the property that they want. Some people make it a point to always offer 20% lower than the price, or 10% lower. However, this kind of formula doesn’t always work. Most of the time, sellers will feel a lot more comfortable dealing with buyers who make intelligent offers.Here are a few tips to help you on how to determine the price of the house you want to make an offer on.Comparable Listings
One way to determine the value of a property is by comparing it with other comparable properties in the area. You can do this by looking at homes listed over the past six months in the same neighborhood. It’s better if the houses you compare the house you want to buy to are within no more than a quarter or half a mile in the vicinity. Don’t include houses that are on a different area or are divided by major highways, neighborhoods, etc.The size of the properties you are comparing your potential purchase with should more or less be similar in terms of lot size and the size of the house itself. Finding comparable houses isn’t as simple as it sounds, but if you look at the details closely, you can find several ones that will fit your purpose perfectly. The age of the house also comes into play here. Older houses will be priced differently from newer ones, even if they are roughly the same size and belong in the same neighborhood. Depending on the style of the house and the district you are buying in, some old houses will surprisingly be more expensive than newer ones. Essentially, avoid comparing apples with oranges even if they are in the same basket.Days on Market
Get the history of expired listings and those withdrawn by the sellers. Determine how many days those properties sat on the market before they were withdrawn or expired and compare the price when they were re-listed. Determine the price reductions involved so that you can be familiar with the ratios.Market
Are you in a buyers’ market or a sellers’ market? In a buyer’s market, you may have a little wiggle room when it comes to negotiations. During a seller’s market, on the other hand, it’s often considered good practice to add 10% to the last comparable sale.Knowing all the technicalities to coming close to a reasonable offer is important but it’s also important to determine how you feel about the house and what the house is worth to you. At times even if a house is priced lower than your expectations, if you don’t feel sold about it, the worth of the house will not be the same to you. Most people have a gut feel about how much a house should be worth. Balancing your gut feel with the facts is a good idea.

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