Buying a home is an important decision and that step should not be taken without doing your research. An educated buyer is in the best position to make the right decision about this major purchase. If you are knowledgeable about the housing market and procedures your transaction will go much smoother.
The best advice for prospective homebuyers is to hire a real estate broker. Again, research the brokers in your area. Talk to several and go with one you feel has a grasp of what you are really looking for in a home. Three items to look for are; an understanding of the market, knowing their client’s needs and finding properties that are great investments. A good broker will take the guesswork out of purchasing a home.
One item your broker can do for you is to help you understand property evaluation. A recent broadcast of “Eye on Real Estate with Dottie Herman” discussed the three most important aspects to buying a home. Herman is the CEO and President of Prudential Douglas Elliman.
Value
The value of a home is different for each buyer based on how they are planning to use it. Herman states that lifestyle, transportation needs and schools. This value will be different for a family with children or a family with no children. The value in their eyes will be different.
Cost
Herman states that many sellers believe the cost of the house is what they paid for it plus improvements and renovations made during their tenure. By improving the home they are increasing the value of the home even though the cost of the home may remain the same. Herman emphasizes, “Cost and value are not what the price of the home should be or shouldn’t be.”
Price/Fair Market Value
The fair market value price is what the property is worth at today’s financial level. Fair market value may be determined by looking at other properties similar sold in the last six months. She goes on to warn that Comparative Market Analysis will not tell you everything you need to know.
There are a few things that CMA will not be able to help you in some areas. A house built in the same neighborhood, by the same builder and at the same time will look totally different from one another in ten years. Looks and market value will depend on the condition of the property inside and out and such things as cleanliness and general upkeep.
Another item that can affect the value of the property is the view. If the view is a beautiful lake, mountain, or stunning forest people will pay a premium for the view. School districts can also determine the fair market value of a property. A buyer needs to do some online research will tell you what the schools are like, crime statistics and other important information about the location.
Neighbors might also be a consideration when looking at the fair market value of the home. If the house you are looking at is immaculate and well maintained, neighbors who are not tending to their lawn and the upkeep on their home may decrease the value of the property you are looking at.
Once you have all the information, ask your broker to give you all the information on the homes you have selected to look at as a possible new home. Nothing takes the place of actually looking at the property. Appraising a house is an estimate and Herman states, “there is no exact science to pricing.”
For more information, visit http://www.elliman.com/.
