Purchasing a home is exciting, but it’s important to do as much research as possible before you buy. An educated buyer is in the best position possible to decide on a purchase, something nearly all real estate experts encourage. Being knowledgeable about the process and the latest happenings in the market can make it much easier to complete your transaction.
One of the most important steps in navigating the world of real estate is hiring a broker. Research real estate brokers, selecting the individual or firm that you find to best understand your unique needs and interests. Your broker’s responsibilities will include understanding the market, understanding your expectations in a property and finding properties that provide excellent investment value. Your broker removes the guesswork in your determining the worth of various properties.
Having found a trustworthy broker, you need to research and prioritize your desired attributes in a property. You also need to determine your budget. However, the average buyer may not always understand these issues from a simple evaluation. In The Art of Negotiations, a recent broadcast from Eye on Real Estate with Dottie Herman, the top three aspects of home buying were discussed by Dottie Herman, the President and CEO of Prudential Douglas Elliman. As she explains, worth of a property may vary in meaning depending on the consideration of value, cost and price.
Value is deemed to be an opinion based on how a home or property will be used. It is calculated differently according to lifestyle. For one, proximity to public transportation may be important. For another, this adds no value to a property. For another, the quality of public schools in the neighborhood is important. For the retired couple, though, schools may not affect the valuing of a property.
Cost consists of the amount of money paid for a home as well as that invested later on through improvements. Improvements usually increase a home’s value, but they may not affect the cost. Buyers will make offers that are based on the value of the home. If a buyer values a move-in ready setting, there is likelihood that a greater cost will be considered because of this value.
Price is yet another factor to consider. What the home should be worth determines price, but some people don’t correctly price their properties. It’s important to look at the fair market value in order to price a property correctly.
Fair market value can be understood by considering a property’s worth in light of current conditions. Your broker can help in this determination by making a research-based comparison of similar properties sold in the last six months. According to Herman, though, it’s important to be aware of things that a broker’s price opinion, BPO, won’t tell you. Likewise, be careful about details lacking in a comparative market analysis, CMA.
Wear and tear isn’t included in such comparisons. Two homes built at the same time will be very different 10 years later. Remodeling and landscaping may vary greatly. A good broker will research these important details.
Neighbors can affect the value of a home as well. Unkempt properties can create a negative effect on value. While you can improve a property, you have little ability to change the surrounding neighborhood. Location also makes a difference in terms of school districts and facilities. While not all households have children, the children nearby attending schools affect them all. The educational atmosphere impacts homeowners in different ways.
Narrowing down your selection of properties, have your broker provide you with a comprehensive report of the homes and surroundings. Discuss the pros and cons of each property at length. As Herman concludes, there isn’t an exact science in the pricing of a home. Appraisal is an estimate. Personal preferences and priorities play a huge role in obtaining the best value as you examine real estate.