One aspect of buying land that is sure to be of interest to you is price. For a landowner who is selling, there are two possible prices – what the seller wants to receive and what the buyer is willing to pay. Those two prices are known as the askingprice and the saleprice. The first is what the seller wants, while the 2nd is the final actual sale price.
Landowners who price their property (asking price) at fair market value, often attract a buyer looking for a “fair” price. In that case the property sells for 100% of the asking price.
Buyers on the other hand generally look at a number of different properties before making a purchase decision. As a result they tend to recognize a property priced higher than fair market value.
In that situation, provided the property does meet their objectives, they may make a purchase Offer that is lower than the asking price. The resulting Offer is then presented to the landowner, who may choose to accept or reject the Offer, or make a counter-offer. This process can continue until both buyer and seller reach agreement on an acceptable sale price or terminate the offer to purchase.
Buyers often ask us why there is so much difference in price between one property an another. Our answer is that when listing a property, we show the landowner what buyers have paid for similar properties in the past. This provides them with a baseline upon which to price their property.
In other words, it is the landowner who decides the asking price, not the broker. It is the broker’s job to present all listed properties to buyers, who then make their own decision on pricing.
Ready to make your dream a reality? Call Paul!