Critical Questions You Need To Ask Before You Buy

This morning on the Today Show their real estate expert, Barbara Corcoran, shared what are in her opinion “the critical questions you need to ask before you buy”. Below are a few of the questions where my opinion differs from hers. The entire video segment is at the bottom of this blog post.

Why is the current owner moving? According to Barbara, the answer is “your single best indicator of how anxious that owner is to sell”. I don’t put a lot of weight on the answer because it’s often hard to verify that the answer is the truth. How do you verify that a seller needs a bigger home or is getting married? Even if you get an answer that appears to show that the seller is really motivated to sell, they may not be. While helping a couple buy a house in Carol Stream this year, I learned that the sellers were being transferred. You might think that they would be quite motivated to sell. However, they wouldn’t come down much on the price since I later learned their relocation company would buy the home if they couldn’t get an acceptable offer.

How long has the house been on the market? I don’t disagree that this is important information, but I do disagree with Barbara’s conclusions. According to Barbara, “if it’s been on the market 6 months and it’s had 3 price reductions, that’s a homeowner who’s ready to pop. You can put in a low bid and get that house cheap.” If it’s only been on the market a month or two, “You’re not going to get a good deal on that house at all.” Yes, in general, the longer a home has been on the market, the more motivated the sellers will probably be. However, that doesn’t mean you can get a better deal. A house that’s been on the market 6 months with 3 price reductions may still be overpriced. A house that’s only been on the market a month or two with no price reductions could be a great deal, if it is reasonably priced. I helped a couple buy a house in Highland Park this year that had been on the market less than 2 weeks when we made an offer. Priced at $699K, the sellers’ first counteroffer was $650K with a gorgeous designer dining room table and desk included! I rushed the contract back to their house before they had a chance to change their minds!

What are the local SAT scores? According to Barbara, “SAT scores are everything. If you have a neighborhood with great SAT scores, you’ve got great real estate values.” I’m not going to disagree that homes appreciate better in better school districts. However, prices will be higher. Whether an area is worth a premium depends on each buyers’ situation. Inversely, just because an area has low SAT scores for the public high schools, doesn’t mean it’s a bad area to buy in. I helped a couple buy a 3 bedroom condo next to the Loop this year. The public high school for the area has below average test scores, but my buyers don’t have children and they love that they can walk to work, theaters, shops, restaurants and Millennium Park in minutes!

Slightly off topic, I find it a bit ironic that Ms. Corcoran would say something like, “SAT scores are everything” when her own blog states “Barbara’s credentials include straight D’s in high school and college.” SAT scores aren’t great predictors of one’s success and happiness in life as Barbara herself has proven. She built a real estate business and sold it for $70M!

ABOUT THE AUTHOR

Fran Bailey shows, previews and tracks downtown Chicago homes for sale giving her the insights needed to help her clients negotiate the best price and terms. Fran has been quoted in numerous Chicago and national publications. To schedule showings of listings regardless of broker or to contact Fran email her at fran.bailey@bairdwarner.com or call 773.793.4516. Learn More