Jeff’s Carlsbad Blog for First Time Home Buyers

Buyers – Get the Data

Posted in Due Diligence,Financial,House Hunting,Realtor's Job,What do I Buy? by Jeff Dowler on January 5, 2007

hand-and-calculator.jpgI have written extensively on How to Become a Good Buyer, and hopefully you have seen all 5 parts of the series (links to the other posts are here – Part 1, Part 2, Part 3, Part 4) and found them helpful.

Here are a few more thoughts. The topic is “Get the Data.”

Whether you are analytical or not, once you decide on the home you are interested in, and assuming you have asked YOUR AGENT to represent you as a Buyer Agent, you should get some data to help analyize the current pricing and figure out an offer strategy. Here are some things you must know about the target home PLUS homes that are similar that (1) have sold in the last few months; (2) are currently active and expired:

  • Days on market (not just the current contract but total time)
  • Any price reductions – when, how much
  • Price per square foot (if it sold for $400K and has 200 SF, the price per SF is $200/SF) – this is a good comparison, but should not be used by itself (your agent can talk more about this). But if YOUR home is substantially higher than any other sales, you have to ask why? Are those good reasons?
  • Comparison of SALE PRICE to LIST PRICE (sp/lp) – for example, right now in many towns where I work homes, on average, are selling for around 95% of the list price. Again, not to focus ONLY on this info, but to gain a general idea of successful sales. It also gives you a sense of the market trends; does it favor buyers or sellers.
  • # of homes active and sold in the last few months. Is there much competition? Are there other homes you can consider?
  • price trend – are prices dropping, stable or rising (again your agent can provide that information)
  • Previous offers on the target house, if any – what they were (if seller will share that), what the contingencies were, etc.

And put yourself in the sellers’ shoes – if YOU were selling this house, what do you think would be attractive,  given what you know.

As always, the knowledge and advice from your REALTOR will be the best help to you in figuring out how to proceed with an offer that will be successful, and keep you from overpaying in this market.


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