Properties in great demand don’t last long on the market. Those that hang around have prices that are mismatched to what current buyers are willing to pay.
My client and I had been looking for a couple of months for a condo that matched her needs. When she found one that she really liked it was time to decide on an offer price. The basic facts were these:
- The original list price was $265,000.
- The current list at the time my client decided to make an offer was $260,000.
On the face of it, the seller’s asking price of $260,000 seemed reasonable and my client was willing to offer that price (it was well within her financial window) until I dug below the surface. Here’s what I found:
- In the area where the condo was located unit sales for condos had gone up in each of the prior 3 years.
- The price point range of the subject condo was right in the heart of the market. In fact, it was in the most popular price point range.
- In the past year sales in that price point range were 6 times greater than the number of active listings in that price point range. In other words recent demand far exceeded current supply.
- Despite the bullish market conditions, the condo unit in question had been on the market for nearly 4 months.
So, using a system I developed called Hyperlocal Market Analysis, I ran an analysis of time-on-market versus price sold. Time is the currency buyers use to assess the demand for a home. Properties in great demand don’t last long on the market. Those that hang around have prices that are mismatched to what current buyers are willing to pay. The analysis pointed to a buy-price target of around $245,000 ($20,000 less than the original asking price). So we opened the negotiation at $235,000 and found common ground at precisely the price target of $245,000.
Here is the takeaway on this: As a certified buyer’s agent I have a responsibility to treat buyers as clients, not customers. That means I am bound to drive the best deal I can even if it costs me money. If this is what you want in your agent, pick up the phone an call me at 973-865-1863.