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Tuesday, August 15, 2017

The Mathematics of a Home Purchase Offer....

I showed a house recently where the prospective buyers liked the "blank slate it offers."  The blank slate refers to this property's very neutral decor (a lot of white spaces).

The prospective buyers started adding up the costs to make the house like they want (make it their house, I suppose).  Experience has shown me that that many times buyers like to talk through the process of future changes.

This particular house is less than fifteen years old so it is not a 1960s structure in need of a half century update.

Their ideas for "desired" change did include some very nice sounding options.  I think the dollar amount kicked around was close to $40,000.

It is always nice when a prospective buyer talks enthusiastically about becoming an owner and "makes a house their own."  In this case the discussion turned to subtracting these changes from the listing price.

BUT, DESIRED FUTURE CUSTOMIZATION CHOICES SHOULD NOT BE AT THE SELLER'S EXPENSE.

The mathematics of a home purchase does not mean take the listing price and then start deducting the changes you want to make in the future.

When a home is listed at a price that is reflective of the market, the competition, and its current condition, there may be some room to negotiate the final purchase price.

BUT, OPTIONAL CHANGES SHOULD NOT BE DEDUCTED FROM THE LISTING PRICE.

This is not to say that repair issues that impact function or performance should not be addressed in the offer price or concessions requested (such as a flooring allowance).

Still, the mathematics of a home purchase offer are based things such as: the comps (recent sales, other similar properties on the market), motivation, time line and factors such as ability to purchase/finance options.

Of course, in the end, buyers can make any offer they desire.  But, in a seller's market with limited choices available, serious buyers rarely try the low ball route!

Now I wonder if a car dealership would accept an offer on a slightly used car based on the updates I want to do... paint job, some new tires, maybe an engine tune up...

Have a question about buying a home in Florida?   Call or text me at 321-693-3850.


agent@moving2brevard.com








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