Hilton Head Island Price Offerings
The perfect home should fit both your needs and your price range. But buying a house isn’t like buying a car or a pair of jeans; it is it a matter of give-and-take, of negotiation. Don’t let the word ‘negotiation’ scare you. It’s part of the whole process.
First you’ll want to make an offer which can be for more than, less than, or the seller’s exact full asking price and terms.
What price do you offer?
The big question is what price you should offer. You already know the seller's asking price, but what price are you willing to pay and how do you come up with that figure?
First, look at recent sales of similar properties (comps) to come up with a price range. Then analyze additional data, such as the condition of the home, improvements made to the property, current market conditions, and the circumstances of the seller. This will help you settle on a price you think would be fair to pay for the home. Finally, depending on your negotiating style, adjust your 'fair' price and come up with the amount you want to put in your offer.
Comparable Sales: Comparable sales, or Comps, are recent sales of homes that compare closely to the one you are looking to purchase. You should compare prices of homes that are similar in square footage, number of bedrooms and bathrooms, garage space, lot size, and structure. If the home you are interested in is part of a tract of homes, then you will most likely find some exact model matches to compare yours against.
Several large sources of information on comparable sales are easily accessible for a real estate agent, but access to these sources is in some cases impossible for the general public. Two of the most helpful information databases are the public records and the Multiple Listing Service. To begin, you will need to determine the home's true market value; a CMA (Comparative Market Analysis) will tell you at what price similar properties have sold.
Property Condition: Since you have toured the property you are interested in, you should know how it compares to the neighborhood. Put the home in one of three categories: average, above average, or below average (in terms of the neighborhood).
Your inspection will reveal the true identity of the property. When evaluating a home's condition, there are a number of things you should consider. Structural condition is the most important, so check the walls, ceilings, floors, doors, and windows. The front and back yards should also be in reasonably good shape. Information on the condition of the homes from your comparable sales list will be helpful, too, plus your agent may have actually visited most of those homes and be able to provide key insights. Remember to give special attention to properties offered 'As Is.'
If the home is a fixer-upper, be sure you determine an approximate cost for renovations. Then deduct these fix-up costs from the 'good shape' market value. That should give you the true value based on the condition of the property. If you offer more than this amount, you may be cheating yourself by paying too much for the home.
At most Open Houses you will find a fact sheet with details about the home. The most complete sheets spell out lot/house size, square footage, room sizes, property taxes, average monthly utility bills, and the ages of appliances and major mechanical systems, as well as the number of bedrooms/baths and other basic data. Sellers and their agents are required by law to warn buyers of 'material’ defects in a property that would not be apparent during a routine inspection.
If this looks like a house you'll want to pursue, sketch out floor plans on your first visit; they'll help you envision the house hours or days later. Also jot down special features. If you're looking at several homes, these notes will help you differentiate between them.
Market Conditions: Adjust your offer according to the condition of the overall real estate housing market. For example, in recent years and in many parts of the country there has been a shortage of homes compared to the rising number of buyers. This growing gap has resulted in quick sales, often for the full asking price. In some areas multiple offers, occasionally for more than the asking price, have been popular.
If the market conditions include a much lower number of homes than buyers, you will want to consider making your top offer first. You may even want to offer full price, if possible. Check with your agent to see what advice he or she can give as to other offers that may be coming in and the best strategy for you.
Other Factors: Find out how long the house has been on the market—if it's been a relatively long time, something may be seriously wrong. The house could be in questionable condition, have structural problems, or suffer from poor marketing by the seller's agent. Or it could just be on a busy street. Also avoid buying the best house on the block. The best house will appreciate at a slower rate because other less-valuable houses nearby bring down the value. You can benefit from buying the lowest-priced house in a nice neighborhood because higher-valued neighbors will accelerate its appreciation.