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How Accurate are Prices on Listings?

questionwords wide How Accurate are Prices on Listings?

Q: I have been looking at homes within the $40,000 range on Realtor.com, but I am wondering if the prices are true? Are they the asking price, or the starting price of an auction? Also, I have been in the military for the last four years, but I am out now and go to school full-time with my GI Bill; will that monthly income be considered good enough for a loan?  – Anonymous

A: In my experience, the price listed on Realtor.com for active listings is the seller’s asking price. Whether there is room for negotiation is dependent on the seller. In general, the ultimate price at which a home sells is a product of the negotiations between the buyer and the seller and the market conditions for that home.

I cannot tell from your question if you are looking at bank owned properties, however, you mentioned auction which is usually associated with a bank owned property (at least in my market). Some bank owned properties are sold through an online bid process. Again, the list price for such properties is the asking price. It should be noted that banks have an appraisal or brokers price opinion (BPO) done on their properties before they go on the market. An appraisal or BPO provides the bank with market value of the property. Sometimes properties that are sold through an online bid system sell at the asking price, sometimes below, and yes, sometimes even above the asking price. It really depends on the buyers who bid and their perception of the home’s value.

To determine your purchasing power you should really speak wth a lender. The loan originator is in the best position to determine whether the income you are currently receiving is sufficient for you to buy a home and in which price range. Please note that there are other factors such as credit scores, credit history and total monthly debt that also affect a person’s purchasing power. Before you commence looking for a home I would recommend that you speak with a lender to get prequalified, determine your purchasing power, and review which loan programs best meet your needs for your current situation.

Maria Hagan is a Realtor® with Prudential Connecticut Realty in Wethersfield, CT.

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