Catching a lot of attention this week in the real estate world, are the results we are seeing in “list-to-close price gaps.” This price gap is the difference between the price of a listed home and the price you want to pay for it. According to an article in MainStreet, the difference between the seller’s asking price and the final sale price is diminishing. This means that sellers are getting offers and eventually sales near their original asking price. According to the study by MainStreet, the average home in America sold for 98.3% of the asking price in December of 2013, a nice increase from the 97.1% in January of 2011.
There are different ways you can look at this news. Some may think that it is only good news for the seller because they are getting ideal prices for their homes and buyers aren’t getting a smokin’ deal. However, this is a positive sign for buyers. Because the sellers are getting such solid prices for their homes it shows a strong correlation between price and state of the market. In this case, the buyer can be assured that they are paying a fair, accurate and realistic price for the home, not some inflated, bogus one. When homes are determinedly priced and selling fast, the buyer can feel assured that the value is correct and thusly face a much lower risk of losing money on that home.
Some big names in real estate and market analysis world have made comments about the strengthening market. The CEO of ZipReality, an online housing data firm, stated, “the gap between the listing price and closing price of an average home in the United States continues to narrow.” Florida’s market does indicate that the price gap is closing for us too, although we are not among the narrowest. Some of the states with the narrowest list-to-closing price gaps include: California, Colorado and Arizona.
If you are looking for a home, here are some key factors you want to consider when comparing the price gap (the price listed and the price you want to pay):
- Hire an agent: Having an experienced agent on your side will provide you with extra knowledge about the area and give you important information about the transaction of purchasing a home that you may not think of.
- Find “comps”: Comp is short for comparable. When you find a home you love and want to make an offer but aren’t sure if it is realistic and fare, find something comparable and use that as your guide. It is often a good idea to have more than one or even several comps per home. The comp should be very similar to the home you are interested in. Alike in square footage, location (i.e. waterfront, beachfront, golf course, interior etc.…), style, lot size and quality. When looking at these you also want to see a history of sale of these comps to see what prices they have sold for and what they were originally listed for.
These are just some helpful hints when it comes to purchasing a home and another positive indicator of our healing market. The process of home buying and home selling is unique from buyer to buyer and from seller to seller. Having an experienced and knowledgeable agent on your side ensures an easy and enjoyable process.
If you have any questions about south Florida real estate, please contact our team of professionals to assist you in all of your home buying and selling needs.