**In case you can not view this video here, please click the link below to view All About Making an Offer for a Pleasanton Home on my YouTube channel: https://www.youtube.com/watch?v=LYcqWKQ1sn0&feature=youtu.be**
00:28: Hello and welcome to 680 home video channel, a web series where we answer all of your real estate questions. I’m your host, Theodora, and I am talking to local East bay real estate broker, Doug Buenz.
00:40: Hi Doug! It’s great to see you. Today’s topic is the offer process. So, Doug, please tell us how one goes about deciding what to offer on a home.
00:51: I’d be glad to. That’s not an easy question. The short answer is, it depends. There are several factors involved. One of them is how long has the property been in the market. That’s a pretty good window into how attractive the home is to other purchasers. If it has been in the market for 7 months, it’s probably a little bit overpriced. If it has only been in the market for 4 days and there’s people already talking about an offer, then it’s probably priced pretty well. So that’s certainly one of the factors.
1:26: The second factor is seller motivation. How motivated is the seller? If the seller has to start a job in Mississippi in 2 weeks, they’re gonna price it in one way and if the seller has 7 months to sell it and is willing to hold out, it’s likely gonna be priced a little bit higher than what the market is. So it is important to determine the seller’s motivation.
1:48: It’s important to determine if there’s other interest in the property. If there’s another buyer whose making noises like they maybe writing an offer then that would change the dynamics and probably force your hand a little bit as a buyer.
2:01: Another factor is how long the current owner owned the house. If they’ve only owned it for a couple of years, it’s important to know what they’ve paid for. That gives you an idea of its relative value today. You can take into account the market fluctuations up or down, and arrive at an estimate that way as well. It’s good to look at the price history of the property. If they’ve had price reductions, that probably tells you that the seller is a little more motivated and perhaps right now reduced it down to a point where it’s in the game in terms of market value.
2:36: The other factor is comparable sales. And that’s one thing that your realtor would do for you. It’s also something you can do online with some of the sites now like zillow.com and so as the other sites. You can get what’s called coms or comparable sales. And that’s not a perfect science either. If it’s a tract home, if it’s a rosewood model and a certain development with 4 other rosewood models have sold in the last 6 months, it’s a lot easier to determine what the logical value for the property would be. But if it’s a unique property, one of a kind, then it’s a lot more difficult. Safe to say, the hearst mansion might have a hard time coping out in today’s market. So you probably wouldn’t be able to rely too heavily on coms in that situation.
3:21: The other factor of course is the relative strength of the market at that time. If the market’s quiet or sluggish and it’s definitely a buyer’s market, then that’s gonna impact your thinking in terms of the relative value of the property. If it’s an overheated seller’s market, every seller’s getting 6 offers, that’s probably gonna impact your perception of the property value as well.
3:44: Upgrade in amenities, of course, is important. If it’s a first class property with cherry and granite and stainless kitchen and all the bells and whistles, then that certainly gonna have more value in the market today. If it’s a house that looks like the Brady bunch just moved out of it and it got gold shade carpeting and harvest green appliances, probably not as valuable on today’s market. So certainly, the upgrades in amenities are important.
4:10: Location is always as important. If it’s [4:13] or located well within the confines of the city, close to downtown, then certainly it’s gonna have more value. View is another factor. Unfortunately, there is no chart or book we can go through to determine exactly the value of a view. It is really dependent on what the buyer perceives the value to be. So that’s a little bit of a moving target and a little bit of a range.
4:38: Prior appraisal. You can always ask if the seller has an appraisal on the property. Now, I have to give you a warning on that score. Appraisals are not always very accurate. Exhibit A is the subprime mortgage meltdown. And one of my favorite things to hear from sellers or listing agents as well, we have the property appraised at 1.2 million and the thought that always enters my head is well if it’s worth that, why would you ask the appraiser if you’ll buy it at that. And if the answer’s no, it’s probably not worth that. So take appraisals with a grainer salt.
5:15: All in all, it’s not an exact science, and really what we’re looking for is what’s a reasonable range of value for that property given all these factors that we talked about. That’s the best we could hope for and it’s up to the buyer and the seller to negotiate. As always, a professional realtor can add a lot of input into this and really guide you in terms of what would be a reasonable range for the property.
5:47: If you have real estate questions or need assistance, I do hope you give me a call. I’m worthy of your trust.