Which Homes Can I Afford? Why It’s About More than Just List Price

Sellers Under-Price, Hoping to Get Way Over Price

In 2002, the SF Chronicle noted an increasing trend of concern to Bay Area buyers: Sellers in this high-cost market would list their homes at lower prices than they would even consider accepting, to draw in more buyers and eventually create an auction-like atmosphere, with the end result being a sales price way above the list price (SF Chronicle, Real Estate Section, July 14, 2002). This meant that buyers were often spending time and money pursuing homes that were out of their range. List price alone wasn’t really telling them which homes would meet their needs and price range.

 Sellers Over-Price and Drop the Price Later if Needed

Additionally, another commonly used seller strategy is to first list the home at a higher price than they are likely to receive, and when it hasn’t sold, to later drop the list price, or accept a lower offer (SF Chronicle, March 13, 2003). Yet the buyer initially looking at that property may take the high list price as a sign that the property is out of their range, and thus not even consider the property, which may actually be a good choice for them. Again, list price was giving a misleading picture to the buyer.

Borderline Prices 

If your price range is $200,000 to $300,000, which homes listed at the high end of this range are actually out of range? Which homes listed above this price range (e.g. priced at $310,000, etc) are actually in range (because the owner will sell for less)? It depends on the property, which requires expert market knowledge and understanding of the price behavior of different properties.

 How to Identify the Homes You Can Really Afford (You May be Surprised)

RealNegotiate provides a simple and concrete solution to helping you find which homes really do meet your requirements: RealNegotiate’s automatic statistical analysis uses market data of recently sold properties similar to the kind of property you’re looking for. The software’s Selection tool can show you exactly which of the above properties you have a high probability (likelihood) of purchasing within your target price range, and within any time constraints that you may have. For example, if you need to buy a home within the next 30 days due to job relocation, RealNegotiate can select which homes are likely to meet this need, within your price range.  Thus you won’t bother with deceptively under-listed properties, and will be able to identify the over-listed properties that are actually in your range. You can save time and money, while finding the properties that work best for you.

About RealNegotiate

RealNegotiate is the leading data mining software for real estate negotiation and decision-making. The unique software uses real market data for property sales to help real estate professionals, buyers and sellers gain the most from their real estate transactions, within the least time. The RealNegotiate team includes licensed real estate professionals and computer scientists, who are available to assist customers as needed. You can learn more about RealNegotiate, view demos, and purchase the software at www.realnegotiate.com

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