Written By: Jacquelyn Annete García Vadnais
When trying to acquire a new home or investment property, it can be difficult to ascertain when you are getting a good price on a residential property. Many purchasers view purchasing a residential property as an emotional decision as well, which does not help them get the best value for their money. For prospective buyers that are looking to purchase a new home or a new residential investment property, it is recommended to review the information below:
When trying to acquire a new home or investment property, it can be difficult to ascertain when you are getting a good price on a residential property. Many purchasers view purchasing a residential property as an emotional decision as well, which does not help them get the best value for their money. For prospective buyers that are looking to purchase a new home or a new residential investment property, it is recommended to review the information below:
Key Indicators to Look For to Ensure You Get the Best Real Estate Deal
Analyze Sold Comparables on the Market
When purchasing a residential property, it is best to do your own research, or work with an agent with local experience in the area. This way, the agent will be able to discuss with you comparables that have sold recently. It is recommended to analyze several recently sold comparables that have similar square footages, number of rooms/ bathrooms, and landscaping features as the property that the purchaser is considering buying.
Verify Unsold Comparables on the Market
Another valuable metric to consider are unsold comparables in the area nearby that have been on the market for an extended period of time or that have been taken off the market after being on the market for over three months. By analyzing what prices these properties were offered at, it will be possible to see what the price range should be of the property that the purchaser is considering purchasing.
Consider the Expected Appreciation
If a residential buyer is purchasing a property that they are going to live in, it may be possible for that buyer to make money on the home they need to live in by merely exploring properties or areas that are expected to have a high appreciation rate. By taking this factor into consideration, it could help boost the real estate portfolio of the property owner in both the short, and long-term.
Consider a Home with Dated Appliances or Features
Many residential home buyers make a poor decision to purchase only new homes that are often marked up considerably. Another approach with a lower budget is to buy a home that is outdated that costs less capital up front and then renovate the home over time. Residential home buyers or investors are able to have a great deal of success and return on their investment with this strategy while having a better cash flow.
Don’t Be Afraid to Offer Lower Than the Asking Price
A common misconception is that the seller’s asking price is the final number that will close the deal. If a property has been sitting on the market for some time, it is wise to offer lower than the purchase price. It is important to balance this lowball offer with not offending the seller. Usually, it is best to consider offering not more than 25% below the asking price. If it is a buyer’s market, usually not more than 10% below the asking price. If the property has multiple offers, it is important to realize that making a discounted offer may not work. The other buyers may have offered closer to the asking price and it could start a bidding war. Be sure to consider carefully when trying to submit a lowball offer to be sure that the seller will not walk away from the deal entirely.
Red Flags to Avoid a Property That Is Not the Best Value
Look Out for Roof and Foundation Issues
Looking at the roof of a property and foundation issues are key components to ensure whether a property is priced appropriately.
Analyze the Purchase Price versus the County Appraisal Price
It’s important to compare the property price against the county appraisal price. This will shed some light on how the current owner has priced the property and whether the value is representative of the current market value.
Try to Work Only with Properties Represented By Agents
Sometimes owners try to sell their own properties and may have not consulted with an agent about what their property is actually worth. Many property owners over price properties that they are selling on their own. By choosing to work with properties that are represented by agents, it can be helpful to get the price down in a negotiation to close the deal.
The Property Has a Bizarre Ownership History
Many properties may have title issues, meaning that there may be an individual or corporate entity that has a title interest in the property. When this happens, a seller may be trying to sell the property to capitalize and misrepresent title issues. It is best to check the chain of title carefully before purchasing a residential property.
Final Remarks
Finding a residential property that is an ideal price can be challenging. Residential properties have many more emotions tied to the transaction both on the buyer’s and seller’s side of the deal. It is important for purchasers to separate themselves from the emotions behind the purchase and really assess the current market conditions and whether they are getting the best possible price. By analyzing both sold, and unsold comparables, buyers are able to ascertain what price the property should be and then make a determination as to whether the investment is an ideal fit for their budget. Furthermore, If buyers take the time to work with a real estate agent that has a strong grasp of the market, this is likely to increase the odds that the buyer will get a better price on the residential property that they will be purchasing.
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Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
Analyze Sold Comparables on the Market
When purchasing a residential property, it is best to do your own research, or work with an agent with local experience in the area. This way, the agent will be able to discuss with you comparables that have sold recently. It is recommended to analyze several recently sold comparables that have similar square footages, number of rooms/ bathrooms, and landscaping features as the property that the purchaser is considering buying.
Verify Unsold Comparables on the Market
Another valuable metric to consider are unsold comparables in the area nearby that have been on the market for an extended period of time or that have been taken off the market after being on the market for over three months. By analyzing what prices these properties were offered at, it will be possible to see what the price range should be of the property that the purchaser is considering purchasing.
Consider the Expected Appreciation
If a residential buyer is purchasing a property that they are going to live in, it may be possible for that buyer to make money on the home they need to live in by merely exploring properties or areas that are expected to have a high appreciation rate. By taking this factor into consideration, it could help boost the real estate portfolio of the property owner in both the short, and long-term.
Consider a Home with Dated Appliances or Features
Many residential home buyers make a poor decision to purchase only new homes that are often marked up considerably. Another approach with a lower budget is to buy a home that is outdated that costs less capital up front and then renovate the home over time. Residential home buyers or investors are able to have a great deal of success and return on their investment with this strategy while having a better cash flow.
Don’t Be Afraid to Offer Lower Than the Asking Price
A common misconception is that the seller’s asking price is the final number that will close the deal. If a property has been sitting on the market for some time, it is wise to offer lower than the purchase price. It is important to balance this lowball offer with not offending the seller. Usually, it is best to consider offering not more than 25% below the asking price. If it is a buyer’s market, usually not more than 10% below the asking price. If the property has multiple offers, it is important to realize that making a discounted offer may not work. The other buyers may have offered closer to the asking price and it could start a bidding war. Be sure to consider carefully when trying to submit a lowball offer to be sure that the seller will not walk away from the deal entirely.
Red Flags to Avoid a Property That Is Not the Best Value
Look Out for Roof and Foundation Issues
Looking at the roof of a property and foundation issues are key components to ensure whether a property is priced appropriately.
Analyze the Purchase Price versus the County Appraisal Price
It’s important to compare the property price against the county appraisal price. This will shed some light on how the current owner has priced the property and whether the value is representative of the current market value.
Try to Work Only with Properties Represented By Agents
Sometimes owners try to sell their own properties and may have not consulted with an agent about what their property is actually worth. Many property owners over price properties that they are selling on their own. By choosing to work with properties that are represented by agents, it can be helpful to get the price down in a negotiation to close the deal.
The Property Has a Bizarre Ownership History
Many properties may have title issues, meaning that there may be an individual or corporate entity that has a title interest in the property. When this happens, a seller may be trying to sell the property to capitalize and misrepresent title issues. It is best to check the chain of title carefully before purchasing a residential property.
Final Remarks
Finding a residential property that is an ideal price can be challenging. Residential properties have many more emotions tied to the transaction both on the buyer’s and seller’s side of the deal. It is important for purchasers to separate themselves from the emotions behind the purchase and really assess the current market conditions and whether they are getting the best possible price. By analyzing both sold, and unsold comparables, buyers are able to ascertain what price the property should be and then make a determination as to whether the investment is an ideal fit for their budget. Furthermore, If buyers take the time to work with a real estate agent that has a strong grasp of the market, this is likely to increase the odds that the buyer will get a better price on the residential property that they will be purchasing.
--
Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
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