I probably don’t need to tell you to do research and ask questions of your real estate agent before you make an offer.
Research Recently Sold, Comparable Properties
A comparable property is one that is similar in size, condition, neighborhood and amenities. One 1,200-square-foot, recently remodeled, one-story condo should be listed at roughly the same price as a similar 1,200-square-foot condo in the same neighborhood.
That said, you can also gain valuable information by looking at how the property you’re interested in compares in price to different properties. Is there a big difference in prices of two bedrooms and three bedrooms? You can also ask about comps that are currently in escrow as a pending sale.
Check Out Comparable Properties That Are Currently on the Market (Active)
View other condos and get a true sense of how their size, condition and amenities compare to the property you’re considering buying. Then you can compare prices and see what seems fair. Reasonable sellers should know that they must price their properties similarly to market comparable if they want to be competitive.
Look at Comparables That Were on the Market Recently, But Didn’t Sell
If the condo you’re considering buying is priced similarly to ones that were taken off the market because they didn’t sell, the property you’re considering may be overpriced.
Ask your agent for a CMA, when you have zeroed in on one or two properties. The agent has chosen the properties, but look at the analysis and still ask for the first three lists described below. You want to see the particulars yourself.
1. You really want the property:
Getting a fair deal isn’t just about the numbers. Sometimes it’s about your dreams.
When you’re writing an offer, which may be competing with other offers, you have to factor in how much you want the home and let it have an impact on your proposed purchase price.
If you really want the home and can see yourself living there for the foreseeable future, put your best foot forward when making the offer it to put yourself in the strongest possible bargaining position.
If you are not sure about the property, you have more freedom to try to get a deal.
Does the Price Feel Fair? If you’re not happy with the property, the price will never seem fair, even if you get a bargain. Even if you pay a little over market value for a home you love, you won’t really care in the end.
2. Market Conditions, Appreciation
It all depends on where the market currently sits on the real estate boom-and-bust curve. Even in a seller’s market, properties may not be overpriced if the market is on the upswing and not near its peak.
Conversely, properties can be overpriced even in a buyer’s market if prices have only recently begun to decline. It is difficult to see the peaks and valleys until they’re history. Use your opinion after your research has given you more insights.
3. Make an Offer
Even in a seller’s market, you can always make an offer below list price. Some sellers list properties for the lowest price they’re willing to take because they don’t want to negotiate. Others list their properties for higher than they expect to get. They expect to negotiate downward, or they want to see if someone will make an offer at the higher price.
If the seller accepts your price or counter offers, you’ll have an indication that the property probably wasn’t worth what it was listed for: you have a good chance at getting a fair deal. On the other hand, some sellers may underprice their properties in the hope of generating lots of interest and sparking a bidding war. Ask about this possibility.
This article is based upon Flex MLS reporting, legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review. If you have any other questions, contact me through my website.Harriet Murray