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A seller’s listing agent performs a market analysis before listing the home, advising the seller what they think the home is worth.
No differently, a buyer’s agent should complete a market analysis before making an offer, and for the same reasons. A seller doesn’t want to undersell. A buyer doesn’t want to overpay.
Don’t Work from the Listing Price
You have no idea how the seller came up with the listing price. It is not necessarily an accurate or fair price. Many sellers try to sell their
Your Realtor
This is a key area in which your Realtor earns their money. One day, things like tax records and the Zillow Zestimate might be useful in approximating the value of a home. But that is not today.
Comparable Sales
Your Realtor should provide a list of comparable homes in the same neighborhood. What is comparable? Ideally:
- Sold in the last 12 months
- Same neighborhood
- Plus or minus 250 square feet
- Year-built plus or minus 5 years
- Approximately same lot size
- Matching pool / no pool
What now?
As discussed in the article on The Offer, you can use your Realtor’s market analysis of the home you are interested in to inform your offer. Here’s how to use the market analysis depending on the situation:
Underpriced
If the home is underpriced, it is probably likely to get multiple offers. You might offer at the asking price or a little bit under, but you likely want to be more aggressive before another buyer makes an offer and you risk paying more or losing the home to another buyer altogether.
Overpriced
This is probably the most common scenario, as a seller is trying to get the most for their home! Offer at approximately what the market analysis suggests is a fair price for the home. You can even share the market analysis with the seller. That doesn’t mean the seller will accept it.
Multiple Offers
If there are multiple offers already, the market analysis helps determine what other offers might be offering, and what you are comfortable offering. Sometimes, for the right home, it can make sense to offer a little over the market value.
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