Home Pricing
9th May 2008
A new girl at work called me yesterday around 4 pm at my desk. I was so excited because she was asking me to do a price analysis on a home that she was looking at. She had offered $131,000 and to pay her own closing costs. Asking price for the home was $145,000 and the counteroffer that the sellers were giving her was $141,000 - a difference of $10,000!
Zillow said her home was worth $120,000 and my old 5% simple compounding rule put the home at $144,000, so I think $131,000 was a very fair offer. The owners had paid $90,000 12 years ago. I cheered her up and told her to stick to 131, since the market is horrible. Her real estate agent pushed her to go up to $135,000. Of course, the real estate agent doesn’t mind if she makes extra money!
I explained to the new girl that it isn’t often that she gets a chance to make $10,000 in one day and to stick to her guns, but not to feel pressured by me. There are tons of other homes out there. I can’t wait to see what she did. I was just excited that someone actually asked me for advice, instead of spending their money stupidly!
May 10th, 2008 at 1:25 am
That is certainly exciting. In the short time that I have been at my new company, I have helped two people through their “first home buying” process. It’s interesting how difficult it is to give advice when the recipient is enthralled with a home and really trusts their realtor.