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How Much Should I Offer?


Today’s question is a one that I’ve heard from every buyer I’ve had the pleasure of helping in real estate.

Q: How do I know how much to offer on a property? A.S. – Woodinville, WA

A: Well A.S., that’s a very common (and good) question. No buyer wants to feel like he/she is overpaying for a home in this market (or in any market), but especially in a volatile market where no stability is in sight.  Back in the early 2000’s when it was a “sellers” market, buyers were less concerned about price and more concerned about NOT losing the home to other buyers in bidding wars.  That’s because they believed that homes would continue to appreciate at an unprecedented rate. Times sure have changed!

That’s why it is especially important that the first thing you do, is make sure it is the RIGHT home for you. If it’s not the RIGHT home for you, does it really matter that you got it for a great price? Since you’ll likely have to stay in your home for 5+ years in order to recoup your costs, you better like coming home to it every day!

The next step is to have your Realtor complete a CMA/BPO on the property.  I could (and probably will in the near future) write a separate post on the many factors that go into a thorough CMA/BPO, but suffice it to say, not all homes are created equal.  I’ve seen some agents try and compare a two-story home with a split-level in the same neighborhood with the justification that they both have two levels, and similar square footages.  Yes, there are similarities, but they are NOT equal!

In addition to the CMA/BPO (which should focus on SOLD properties, not homes still on the market), consideration should also be given to how long ago the home sold.  In an area where homes are depreciating at a rate of 5% every six months, a home that sold last year would be worth roughly 10% less in today’s market (all other things being equal).

As important as the price you pay for the home, you really shouldn’t lose sight of the fact that it is first and foremost, a place to live.  If faced with a counter-offer from a seller, ask yourself if you’d be disappointed if you lost the home to another buyer.  If the answer is YES, then does it really matter that you’ve paid a little bit more for the home of your dreams?

Keep those questions coming!

When REALiTY BiTES, bite back!


Should I Pay Down My Mortgage?


Q & A

Today’s Question comes from a client whom I’ve helped several times over the years.  I think he was one of my first 5 clients back when I first began in real estate.

Q: I own a home that is currently worth less than what I owe on it.  I would like to refinance, but in order to do so, I’d have to pay down my mortgage enough that the bank would consider a refinance.  Is it worth doing?

A: I have two answers to this question, and the answers depend on the type of loan, and the LTV.

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