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Focus on Value, not asking price!

August 15th, 2014 by Geoff Baldwin

Often buyers tend to over focus on asking price rather than researching what a particular property is worth and this is causing disappointment when they are outbid by another buyer who has done their homework according to, RE/MAX WA Managing Director, Geoff Baldwin.

“The tendency for less experienced buyers is to look at the asking price and to make an offer well below that price however it should be remembered that the asking price is based on an estimation by the agent and heavily influenced by the seller’s motivation and situation”, Mr Baldwin said.

“It is very often the case that the seller has purchased another property and with that in mind they have priced their current property to sell quickly rather than building in a wide negotiation factor into their asking price.

“Recently, the incidence is increasing of buyers falling in love with a property then putting in an unrealistically low offer only to be outbid by another buyer who recognised the asking price was spot on. “The easiest method to establish value is to research what the median price is for that particular suburb and then assess where the property compares to that median price.

“If it is better than average it is likely to sell for more than the median and if it isn’t then it is likely to sell for less regardless of asking price.

“Rather than just looking at the asking price and automatically coming in lower, ask the agent to show you documented evidence of other properties in the area that have recently sold then make an offer based on the actual value”, Mr Baldwin said.