Spring TX Real Estate: Market Report October 2009
November 21, 2009
Happy Thanksgiving!
November 26, 2009
The vast majority of buyers want a deal. They don’t want to overpay and they don’t want to pay full list price. I understand buyers wanting a deal because I like a deal too.
But what is full list price and can paying full list price still sometimes be a deal?
Paying full list price occurs when the house is listed for $158,000 and the buyers agree to pay the sellers the $158,000 price. In this scenario the sellers are receiving what I call a “net sales price” of $158,000.
In the next scenerio, the buyers agree to pay the full list price of $158,000 but the sellers have agreed to contribute $5,000 towards the buyers closing costs. The sellers are receiving a “net sales price” of $153,000 ($158,000 sales price – $5,000 contribution to buyers closing costs).
In both of these scenarios, the buyers are paying full list price but are they overpaying or are they getting a deal? To be able to determine if the buyers are getting a deal or NO deal, we would need to determine what similar style homes in the same area have sold for recently (the comps).
The comps show similar homes have recently sold for $162,000. In both scenarios, the buyers are getting a deal. Yes, the buyers are paying full list price but paying full list price doesn’t have to mean the buyers are overpaying.
The idea that paying full list price is not overpaying is difficult for many Spring Texas home buyers to understand especially first time home buyers. But before you assume you are overpaying, you need to review and study the comps. The comps and not the list price hold the answer to the question “Are you overpaying if you pay the home’s list price?”
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