Before you even consider making an offer on a Highland Park property, you must consider the comparables. If you have a good buyer’s agent by your side, your agent will likely begin pulling comps after you find a home on which you want to make an offer. Comps are simply research on the local market and the buying and selling activity in the area. Your agent will likely come to you with recent sales on homes that are similar to the one you want to purchase. Your agent will also show you additional information, including what the sales price on the sold homes were, and what they ultimately sold for. Your agent will also provide you with information on similar homes that are currently on the market, and what they are being sold for. Finally, your agent will provide you with additional information on the home in question, including whether the price has been dropped, how long it has been on the market, and (hopefully) the reason the homeowners are selling.
All of this information is then used to determine whether the asking price is fair. And, if it is not, where you can start your offer.
For many buyers, understanding the comps before making an offer provides them with the information they need to proceed with an offer and negotiations on the property in question. Here are a few reasons why you must always wait to make an offer until you have the comps to back it up:
- Comps will allow you to better understand the value of the home and other homes in the neighborhood. If the home is priced at $200,000, yet similar homes in the area have sold for $180,000 in the past year, this information may give you the ammunition you need to come in at a lower price.
- Comps can back up your offer. If the homeowner scoffs at your offer, for example, your agent can then simply show them the data backing up your offer. In other words, it is much easier to negotiate when you have done your homework and can present it to the sellers.