Three Great Tips To Buying A Home

Three Great Tips To Buying A Home 1.    The Comps. Comps is just industry shorthand for sales data on similar homes which were recently listed and/or sold (“comparable” listings and sales).     While you should view the actual sales prices (vs. list prices) of comps that have recently closed escrow as very informative and influential for your pricing decision, the list prices of homes that are lagging on the market can also help educate you about what price points you should buy. 2. DOM [Days on Market].  The MLS data will provide you with comps and information about how long the various listings in your market have been on the market. You can use this information to get a gauge on what the average DOM, or Days on Market, is in your neighborhood or properties of choice.  This empowers you to look at the comps with more nuance and to use them more strategically to influence your buying decision. The homes that have lingered on much longer may be overpriced and may even require a list price reduction to sell.  3. List price vs. sale price. Here, LP stands for ‘list price’ and ‘SP’ stands for ‘sale price or ‘sold price.’  This comparison - sometimes expressed in a ratio, other times in terms of how many percentage points the sale price was over or under the asking price - gets at the difference, if any, between what sellers are asking for homes in your area vs. what buyers in your area are willing and able to pay.  When homes are selling for more than the asking price as a pattern or average, this usually suggests that your market is more of a seller’s market or that multiple offers are commonplace.  And the opposite is true - when homes typically sell for less than the list price, it indicates that buyers may have superior negotiating power.