How Much Should We Pay For That Home?

 one question to ask a client

Figuring out how much to pay for a home is not always an easy thing to do. Since we often get asked this question by our buyer clients, we decided to take some time to explain a sure fire way to figure out the answer.

As a disclaimer,  let me say that as an agent, we do not tell people what to do. It is not our money and not our decision to make. Plus, it is impossible for us to duplicate the feelings you have about a particular home.

We are here to give you information and help guide you along the process. At the end of the day, you need to own this decision, not us.

 

DOLLARS AND SENSE

 

When considering value of a home, it is helpful to look at the sales price of other similar homes that have recently sold. Most likely, those will be the comparable sales that an appraiser will use in their report.

It is also a good idea to tour the market and see other homes in the same price range that are currently for sale. Typically, the homes that are the nicest in their respective price point will stand out. Hopefully that will be the case on the home you are about to purchase.

On a side note, make sure you are comparing apples to apples.  If you want to buy a newer home, you need to compare it to other homes similar in age and amenities.

While not the most important statistic, it is still a good idea to see what other homes are selling for in terms of price per square foot. It would be ideal if the subject property fits within the range. If the home you are considering buying is priced higher in terms of price per square foot than recent sales, there better be a good reason.

DON’T LET FEAR STAND IN YOUR WAY

Most buyers simply are afraid of overpaying for a home. This is totally understandable and something that every single buyer thinks about.

We suggest doing the following exercise that will help you define your ceiling, the maximum you will pay. This is the most important number to figure out, one which everything else will work around.

Let’s say you thought a home was worth $450,000. How would you feel if another buyer ended up buying that home for $450,100. Can you accept that or would you feel regret?

The magic number is to come up with a price that you absolutely positively will not exceed under any circumstance. If another buyer pays even one penny more, you would be ok with that and move on to another home.

That my friends, is the price you should pay for that home.

Obviously, if you can get it for less, that would be great ( we will talk about negotiating in a future post ).

Buying a home is certainly a complex transaction. Hopefully, this will put things in perspective and help make the process just a little easier on you.

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ABOUT THE AUTHORS

The above information is compliments of The Schuman Team, Amy and Dan, of Howard Hanna Real Estate Services. They specialize in Solon luxury homes, relocation, and first-time buyers.

They can be reached at 216-346-3235 or 216-403-9189 or via email, danschuman@howardhanna.com or amyschuman@howardhanna.com.

The Schumans service the following Cleveland area suburbs: Aurora, Bainbridge, Bay Village, Beachwood, Bentleyville, Chagrin Falls, Cleveland Heights, Gates Mills, Highland Heights, Hunting Valley, Lakewood, Lyndhurst, Mayfield Heights, Mayfield Village, Moreland Hills, Oakwood Village, Orange, Pepper Pike, Shaker Heights, Solon, South Euclid, University Heights, Westlake, Woodmere.

How Much Should We Pay For That Home is the property of The Schuman Team and may not be duplicated or used without their written consent.©January, 2014

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