That answer, my friend, is completely up to you. Only you can decided how much you can afford or are willing to pay. The market determines what the home is worth (demand). However, what the house is worth and what you can afford are usually not the same- or even close. If you can only afford $500,000, then don’t go looking at houses in the $700 and $800 range. Why torture yourself? It could only lead to complete disappointment and you’ll get offended, and the homeowner gets offended and then you become discouraged and then well…you know the rest.
Working with buyers I’ve come to the conclusion that everyone falls in love with the house right above their affordability scale-including myself. I love my Toyota, but that Mercedes really looks nice–especially with me in it. If someone is looking for a $500,000 house, they’ll fall in love with the $600,000 house. If they’re looking for a $400,000, they’ll fall in love with the $500,000 and so forth. It’s with almost complete certainty that this phenomenum occurs in real estate with almost every buyer.
Statistically, homes in Westchester County are selling for 5-7% below asking price. However, don’t assume that the asking price is reasonable. Verify the market value of a home by asking your agent to pull up comparables of similar homes that have recently sold in the neighborhood and also by previewing the other homes for sale in that same neighborhood. You need to evaluate ALL the facts. You need to gauge the value of the features and benefits of each home compared to the price. For example, are you willing to pay a bit more to be close to work, daycare, the train, or a family member. How about condition? Are you willing to do work, or do you want the home in ‘granite and stainless steel’ condition? Garage vs. driveway? You get the point. Evaluate the entire package!
As the NY Lottery slogan goes, “Hey, you never know”. Don’t assume the seller’s situation. You don’t know why they’re selling, how much they are willing to negotiate, or what they are willing to do after the inspection. On the other hand, don’t assume that because the home has been on the market for 6 months that the seller’s are desperate. You just don’t know!
When submitting an offer-just remember to be sure that this is the house you want because you never know. The sellers just may take your offer.
