Jeff’s Carlsbad Blog for First Time Home Buyers

How do I Evaluate the List Price of a Home?

Posted in Financial,House Hunting by Jeff Dowler on November 26, 2006

If you are currently in house hunting mode, very likely the following question has occurred to you – how do I evaluate the list price of a home? And perhaps, what this really means is “how do I know what to offer?”

What you need to know, and ask yourself, is the following:

  • Is the list price reasonable in this market? If yes, why; if not, why not?
  • How does the price compare to other similar homes on the market?
  • What have similar homes sold for in the last 3-6 months?
  • How much is the home worth to me? (i.e., if push comes to shove, how much am I really willing to pay, even if the price is reasonable?)
  • Is the seller willing to negotiate the price?
  • If seller IS willing negotiate, by how much? (or, what is reasonable?)
  • What is a reasonable price for my initial offer?
  • What are the market conditions and how are they impacting pricing and offers?

The advice and guidance of a REALTORis pretty important here, unless you are an expert in house buying. Since you are not a licensed agent you do not have access to ALL the pertinent data that will help answer most of these questions. And knowing about the seller’s willingness to bargain is tough – while your REALTOR can ask the listing agent, you won’t know until you get into the game. It is probably safe, especially in this market, to assume the seller will negotiate, but the amount will remain in question until the bargaining starts.

The ONE question only YOU can answer is…what is the house worth to you??? Even if the price is reasonable, what it is worth to you will determine if you get to agreement, or decide to walk away. This is something that is important to think about before you get into the negotiation, especially if you are in a multiple offer situation.


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