Buyers, Knowing what the seller paid can help you …Most of the time.

    Knowing what the seller paid for a piece of property and when can give you insight into the value of the property and how the seller will negotiate.  It is not the only factor but it does help in deciding what the numbers will be.

     Assuming the seller made a fair purchase we as agent know what has happened to the market in recent history.  Recent history meaning the last 5-6 years.  If the trends for that building or complex is down then the condo may be less that what he paid for it.  He may or may not have done any upgrades to offset the decline.  Sometimes you find sellers that have put a lot of sweat equity to make up for the decline.  Many times not.  If sales were off 6% in that time period then you can take off 6% to get to a number.

    Match this number up with the recent sales to see how they compare.  Is just another tool for a buyers agent and buyer to use.  If the seller has been in the place a long time this becomes a useless number for value.  But it does tell us he may have plenty of equity and we will to leave with profit.  It is much harder to deal with someone who is going to loose money. 

In the Dark, New Orleans Condos

    The seller may have paid too much for the unit when buying.  This may not  happen as often if buyers do not think like future sellers when buying.  The seller could have gotten a great deal and he just wants to sell and move on.  This is a good position for the buyer.

    This also becomes helpful when looking at bank properties and seeing what they paid for the properties.  They may just want to unload the property quickly at a fair price.  Many times these condos are priced to sell.

     In the end it becomes a tool just like knowing the time on the market, price reductions, time of year selling, general trends, specific trends and other factors that effect values in real estate.

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA