How To Buy A Home For Below Asking Price in Marin County
I had a funny experience over the weekend. An agent called about one of my listings, a great house in Novato, and said, “Don’t you think it’s overpriced?”
Well, we’ve all had listings that were overpriced, but I had just finished a meeting with my seller about this very topic, and we thought for now, the price was good. So I said, “Have you seen the house?”
She said, “No, but my clients think it is overpriced.”
Hmmm….”Well what did your clients say about it after they saw it?”
“They haven’t seen it yet. They just think it is overpriced.”
Resisting my natural urge to scream, I then calmly recited a long list of numbers that I knew inside and out, because I had just gone over them. I told her how many homes were on the market in Novato in that price range, what the average days on market was, what the average cost per square foot was, which ones also had four full bathrooms, lot sizes, etc. I then explained the quality of finishes in this property, that it was actually cheaper on a cost per square foot basis than what had sold in the last 60 days, and that it also had a fully landscaped outdoor entertainment area.
And by the way, we thought the price was good.
“Well, thank you, I’ll tell them,” she said.
If you want to get a house for less than asking in Marin County, you need to be able to justify why, on a rational and emotional level. The agent representing the seller would like to sell the property, but they need rationale to first convince them, and then the seller, to accept a lower price. Remember, there’s a lot of time that goes into figuring out a sale price. But you may have other information that shows why your price is more reasonable. The seller may not listen, but you never know unless you try.
Hint: announcing that neither you nor your client have seen the house is not a good opening gambit!
These are the kind of things you should consider, and your agent should help with this:
1. Compare the property to what has recently sold. Seems obvious, but it’s a great place to start and as noted above, often overlooked. This implies of course that you and your agent have seen the properties in question, and can articulate differences.
2. Sales data. Look at price per square foot; number of rooms, bedrooms, bathroom. Days on market can help, used correctly. The percent of sale price to list price is often overlooked, but also a great indicator of what is happening. That number changes dramatcially too, from Belvedere to San Anselmo, for example, or on a $3 Million property vs. a $700,000 home.
3. Emotional appeal. Sometimes it has no effect at all; in some cases though, it helps quite a bit. Let the seller know who you are, via a letter describing you and your family, why you want the home, what it means to you. I always try to present an offer in person, to the agent and if they’ll let me, to the seller. It’s time consuming but
I think it is a huge advantage, because I can answer questions and make my case for why this makes sense for everyone.
There’s lots more, but this will get you started. Inspections are also critical once you’re in contract.
Does it work? 2005 was a Seller’s market in Marin County. Despite that, our buyers paid an average of 91% of the asking price for property. We haven’t compiled data yet for 2006, but I think it will be even better.
