The price of a property plays a very important role in a real estate transaction. Like any other trader who scouts for a customer to sell his merchandise for the best price, a person who puts his real estate property for sale will also want to fetch the best price for which it could be sold. It is generally found that people realize how hard it is to set the price for the property, only when the final decision to sell the property mis made. It quite usual for a first time real estate seller to become nervous while making a decision on setting the price of the real estate property. This is mainly because many factors used for setting the price of other products cannot be applied to fixing the price of real estate property. Additionally emotions come to play with the decision making process as this usually is one of the most important transaction in one’s life.
First step to take while making a decision on the price is to think from the buyer’s point of view. Think like “What will you do if you were a buyer approaching the owner of your house to buy the property?” At first it will be difficult to switch your mind so as to view from buyer’s perspective. It is a fact that no individual could exactly think like a different individual. But the basic premise of thoughts could be emulated to a large extend. For example, look for various sources of information on assessing the value of a property. You can search the internet, go through different real estate sites that lists ‘FSBO’ ( for sale by owner ), sites of real estate agents in your area etc. You could also consult friends and relatives who might have recently made or know some real estate transactions recently made in their neighbourhood. By gather information from such various sources, you gradually will understand how a buyer will be looking for the best options to negotiate in order to cut a deal with the seller. Once you are able to think like a buyer to assess the value of the property thing will get easier.
First factor to consider is ‘comparables’. ‘Comparables’ in real estate parlance are those properties similar your’s which were either recently sold or currently under sale agreement. More close a comparable is, the more similar will be its price to the price that could be set for your property. In addition to plot size, square feet of the building, finishing, flooring, property condition and neighborhood which are the immediately noticeable features for comparison, age of the property also plays and important role. Property value decreases with age of the building. Among the aforementioned factors, the importance of the condition of the property can’t be stressed enough since it plays a major role in influencing the decision making of the buyer. This includes switches, sanitary, drainage etc. So while browsing ‘comparables’, check if any issue pertinent to property condition is impeding its sale and see if the same issue exists in some form for your property. Also note down any striking features that could be applied to your home for sale at a minimal cost so as to improve its ‘curb appeal’. Similarly inspect every nook and corner of your house as if you are a buyer to make sure every thing is working well.
Like any product put for sale in the market, price of a real estate property largely depends on market conditions. Basically price of any commodity is based on demand and supply. So this means even if you find a close match ‘comparable’ which matches almost all factors mentioned above, the price your property could get could vary from that of it. For example, if the market conditions has improved in the seller’s point of view, like if there is a recent spurt in demand after that ‘comparable’ was sold, you could get a better price. Similarly if the market has become sluggish, with a decreased number of buyers compared to the number of properties currently available for sale, you will be at the receiving end with the buyer having an edge for bargaining with more choices available.
If you realize that you will not get the desired price for the property you set based on ‘comparables’ because of the altered market conditions, you are left with 2 choices. Either you sell your property for the best price possible in the current market conditions or you can wait till the demand increases. Unless you have any pressure of liabilities its always better to wait for the market to improve to get the best price. But in most cases buyer would be looking to get the property sold as fast as possible. In that case you will have to act fast and ‘prepare’ the property for sale. You should also decide upon the lowest price you could accept and put your property for sale for a price with enough room for bargaining so that it will not go below the lowest price you could accept. Keep that price just in your mind without publishing it.
Prepare the property for sale
First task in preparing a house for sale is to improve the curb appeal. Paint your home with the trendy colors so as to impress a buyer in the first visit. Do any maintenance that is immediately conspicuous so as to avoid a buyer from having a second thought because of it. Avail the service of a professional home inspector to check everything is fine in and out and carry out the repair works based on his recommendations. Most buyers employ a home inspector to check for any repairs before they sign the deal with the seller, so if you leave this possibility it will later prove to be fatal with the buyer using them as arguments for bargaining or even backing off from the deal.
Employ a ‘realtor’
A ‘realtor’ is a real estate agent affiliated to the MLS in your area. Although it is not mandatory to use the service of a realtor, most transactions started without a realtor(FSBO) ends up in using one of the realtors for the sale to realize. By employing a realtor you are assured of getting proper guidance for every aspects of the transaction. Additionally he/she along with all the realtors enrolled with the local MLS will promote your site as everyone will benefit from the transaction. Thus you will be able to make a realistic sale offer based on the prevailing market conditions. Employing a realtor also relieves considerable burden of marketing from your shoulders. Further the realtor will act as a mediator in negotiations with buyer. Additionally a realtor will help in getting right professionals to carry out peripheral tasks of the transaction like attorney, home inspector, relocation agents etc.
Be prepared for negotiations
Final step before finalizing a deal with a buyer is to be ready for negotiations. All buyers will bargain and tend to project the draw backs of your house in order to lower the price. So be aware of the plus and minus aspects of your house and neighborhood. By highlighting the strengths and euphemistically countering the drawbacks, you could carry out the negotiation in an impressive manner. At any point of time you should be careful not to let the buyer bargain below the minimum acceptable price you have etched in your mind.
Never be a vulnerable
If one or two buyers says that they are pulling out because the price is too high, don’t make a hasty decision. It could be a ploy to slash the property price. Or they might have made a decision to buy another property. Review the factors you considered while you set the selling price of the property, check with your realtor if the property is over priced in current market conditions. Be patient to see if there are more buyers approaching you. Only after a thorough analysis, should you make a decision on altering the selling price of your property. In short, never be a vulnerable seller who could be easily taken advantage of by a buyer.
Rob Norquist, a real estate agent admits that Newport Beach is as active as it used to be, with some good record sales. He also agrees with the fact that a property, should never be considered deprecated, and as a seller, you should never give up and use the low end price. It is true that, during a certain period of time, depending on the real estate market, client’s desire, real estate auctions, there may be moments when a property’s price drops, but not forever.
Other cities such as, Huntington Beach, Costa Mesa, Irvine or Mission Viejo – are considered among other 25 cities as being the ones with the best real estate property values, with average values of $680,000 and more. The national average value in 2007 was $194,300.
However, some property values are based on subjective answers from residents living in a certain home, so the given numbers , and real estate evaluation may be hanging on a wishful thinking instead of a real appreciation . This is where real estate auctions come in picture, to inform potential clients about the property, and the investment possibilities, giving them a clear image of the real estate’s worth.
Even though some buildings such as Orange County properties , dropped their values in 2007, but they recovered extremely well after. So this is another reason why as a seller, you should never fear if you observe a temporally value drop, because it is normal from time to time.
For instance, about 81% owners, sellers, agents, trusted in 2007 that their estate property values were over $1 million, against 75% in 2006. So things are for the best and it would appear that most of estate agents have finally understood what this business is really about. It takes a lot of patience and ability to maintain your property’s value among top ones on real estate market.
But Norquist, trusts that many Newport Beach arguments are near the mark, sustaining that this city has survived the “housing slump” better than other locations. However, the unexpected surprise attacked more on sales, which he admits that they are on a falling edge right now, but there is still hope for better times.
Newport Beach is very well known for its highest-valued real estate properties in the U.S., being a perfect place for real estate business . It’s location and proximity to the water, and the beach front view increase it’s real estate value considerably. Auctions in this area are very interesting and those who are interested in real estate business domain should never miss them. You can learn a lot on such events.
Experienced real estate agents or even friends will surely advise you that as a buyer you are very likely to come across many real estate properties in foreclosure having perhaps no equity,being over priced . In such moments, lenders sometimes choose to accept a smaller amount than the initial.So you get in the negotiations process. As a hint, when you realize the over pricing phenomenon, you have to understand that this happens when the real estate agent , or seller is aware of the real estate property’s value, and he tries his luck in a raising price. So watch out! The negotiation can become a difficult process especially when reasonable terms are not agreed by both sides: owner and buyer. Negotiations can occur privately or in public, where real estate auctions come in the picture. Of course, a real estate auction is safer and more trustful than a private one. Private negotiations occur especially when the agent is a close friend or relative to buyer’s, and because of the friendly environment some details regarding even the real estate transaction may be skipped. So in situations like this be careful.
Even as a friend, for a real estate agent , money comes first, and friendship after. Of course, during such a negotiation, there can be all sort of problems, such as mortgage value, real estate market, all sort of official formalities, conflict of interests in a particular area etc. Moreover, time a very important issue when real estate auctions are involved. As a general rule, and as an advise for a potential buyer, negotiation process should not be extended on a long period of time, because, as I said before, in time, real estate properties drop their values, and the client’s interest together with it. In this case, not only does the buyer loose, but the real estate agency as well. Why?Because if a property’s value drops, the price must drop as well, if you ever want to sell it again. In this case the under priced phenomenon appears. This is why short sales are preferred. Many Realtors, and clients started using this strategy, because they faced the problem regarding their property’s value.So they decided the selling process should not take too long.
Another important issue refers to the well known “acceleration clause” , which is an official word met in any mortgage document, meaning that the lender, after the real estate property is sold, can demand the payment of the remaining balance for the loan. Realtors can provide more information about this contractual right. If this clause is good or bad for a real estate transaction, it is hard to say, because it has its advantages and disadvantages. Buying a real estate property which has already a mortgage loan represents a pretty raised risk. Why? Because first of all, if the mortgage loan was contracted for many years, depending on the interest’s rate, and marketplace evolution, you may come to pay the house’s price 3 times more. However, if you have experience in monitoring the market place, and find a right moment when every interest’s value drops, you could go for it. It’s kind of a gambling in this business, and Realtors, or individual real estate agents know it best.
Realtors and real estate agents are here on the real estate market, to help clients understand how they can value their houses, what should they look for when trying to sell or buy a house, how to negotiate, and how to win a real estate transaction. Some may say that buying or selling a real estate property is easy, but the fact is that pricing a house is a very difficult process. Many real estate agents, brokers, have suffered many defeats before their first good business, so do not expect their job to be an easy one.
Unfortunately, a concerning price and sales gains of these past years have determined in many cases quitting the real estate business. Many real estate agents who have seen the future preferred to do something else than real estate business. The credit market is also in a critical position, as many Realtors have observed. Mortgage values are also a result of real estate market position right now. Real estate investors have diminished their participation number to real estate auctions, as a sign they have seen it too.
Hiring real estate property advisors before buying properties is an absolute must because these advisors usually know about a wide array of opportunistic and value-added properties plus their knowledge regarding investments in real estate and assets is really helpful in making decisions regarding property investment.
But before you hire any real estate property advisor, make sure that you check his/her credentials. He or she must have hands-on real estate and capital market experience. Apart from that, it is of paramount importance that real estate property advisor has dealt with investment of real estate funds.
In an ideal scenario, overall investment strategy of your real estate property advisor would be based on exploiting the linkage between the high demand and liquidity for stabilized, core real estate assets. In case of low demand, real estate property advisor should have strong real estate skills.
An ideal real estate property advisor is the one who prepares solid plan of action so that investments can be made at an attractive cost basis. In addition, real estate property advisor increases the investment value with help of intensive operational and financial management.
The main objective of a real estate property advisor is to assist the
property buyer in understanding real estate thoroughly, with help of insider’s knowledge. Furthermore, real estate property advisor will play a prominent part in letting you buy your first home or rental get a brilliant loan deal.
It has been noticed that real estate property advisors also play a crucial role in finding a top-notch real estate agent. It’s the job of real estate property advisor to give you all the information regarding agents, lenders, appraisals, and rental properties.
The best real estate property advisor is the one who explains all the methods and procedures associated with real estate in simplified manner to the
real estate investor. Dealing with the right kind of people is quite mandatory when buying properties. In other words, referral is the keyword in the real estate market. Taking this into account, real estate property advisors offer you the names of mortgage brokers, agents and inspectors.
Buying real estate property for investment in the U.K. isn’t as hard as you might think. Once you understand the basics of real estate investment, the process is straightforward. What is buy to let property? Simply put, it’s a real estate property that a real estate investor purchases with the intent of renting it out to either businesses or private citizens. In this article, we’ll present a few simple tips for those who are considering buy-to-let investment.
Do Your Homework First
Before you buy real estate for investment, you should thoroughly research the current market. If possible, try to find other people, either in your area or on the Internet who have experience in this type of investment. Seek their advice for real estate investing and consider it well. Also, check online and in bookstores for guides on the subject. You should be well aware of the disadvantages as well as of the advantages before you look at any buy to let property that’s offered for sale.
The Importance of Location
Next, choose a location. A successful real estate investor knows the hottest locations as well as those to avoid. You need to consider your market here. For example, if you want to rent to families, be sure to find real estate properties in neighborhoods with schools nearby. Urban families are also likely to need close access to public transportation. If you’re aiming for younger tenants, a neighborhood with trendy shops and proximity to nightclubs and other entertainment venues is ideal.
Don’t Underestimate the Competition
You should also consider whom you’ll be competing with when you buy investment property. Check out real estate prices on web sites like “Primelocation” or “Rightmove” to see what other investors are buying and what they’re charging their tenants. A property listing on these sites will also help you determine how long it will take to rent a property in a specific area.
Crunch the Numbers
Once you’ve determined the area, financial analysis is the next step in property investing. For example, you’ll need to determine whether your rental income will cover the mortgage payments. Also, note that mortgage lenders will likely require a deposit of between 15% and 30% of the property’s market value. Once you’re the owner of the property, it’s important to set aside some funds to cover any emergencies that might occur, such a having to make significant repairs to one of the property’s mechanical systems, like plumbing.
Invest for the Long Term
While working out the finances, be sure to ask yourself some tough questions, like “How long can I afford to pay the mortgage if for some reason the property isn’t rented for several months?” If your answer is less than 2 months, you probably aren’t ready to invest in rental property. A final piece of advice is that you should have reasonable expectations. Very few investors can “make a killing” by flipping houses. Remember that you’re in for the long term and that over time a well-chosen real estate property in the U.K. is highly likely to increase in value.
Ian Clark is a real estate consultant and advisor in UK. He has extensive experience in all aspects of Real Estate Investment built over 20 years . He is also the Director of Midas Estates, an online real estate website offering property investment opportunities in UK and overseas. Midas Estates is a property investment company also dealing with Real Estate Property investment with an aim to provide maximum capital growth for the clients as the majority of the clients are looking to secure financial security in the shortest time possible. Ian’s honest presentation of the real estate investing business, including both profit and risks is respected for his sincere, candid approach. He is highly regarded as one of the most sound, dependable source for the specifics behind the sometimes tricky and exigent facets of real estate investing.
Florida Real Estate Properties used to be the most sought properties in the United Stated. Wonderful climate, the second longest coastline in the United States and numerous tourist attractions made Florida one of the major destinations of holiday trips as well as a favorite place for spending one’s retirement. These factors resulted in a steep increase of the real estate sales rate, as more and more people decided to buy properties in the Sun State – either as summer house or places to spend the coming retirement years.
During the last few years, Florida’s popularity drove the real estate properties’ prices to unprecedented heights. This was backed up also by the constantly growing population. Despite the fact that Florida is one of the “balanced” states with the net immigration only a few per cent points higher than emigration, the state’s population is growing very quickly – from roughly 13 million in 1990 to 16 million in 2000 and about 18 million in 2006.
Florida Real Estate Properties: Prices and Trends
What was the Florida real estate market’s greatest strength – the tendency of people throughout the United States to buy second homes there – caused its real estate market to suffer heavy losses during the nationwide real estate industry slowdown. Second homes were among the first properties buyers decided to forget about and there were not enough first-time home buyers to fill out the breach.
As the result the sales rate of Florida real estate properties slumped statewide, in some counties it dropped even as much as 34% between January, 2006 and January, 2007. The prices, however, remained on roughly the same level as before the market slowdown – though there are a few reports indicating that the major (15-20%) price reduction is on its way as we speak. While more and more buyers withdraw, at least temporarily, from the purchases, sellers still intend to try to sell their houses at premium prices. These two factors create the classic from of the buyer’s market.
This trend has been further strengthened by the taxation debate in a few leading Florida counties. Many potential buyers of Florida real estate properties are now holding on the transaction waiting for the decisions concerning the real estate tax cuts before making the foreclosure.
The bottom line
As the market signals are mixed and unclear, the situation on Florida real estate market is currently extremely hard to assess. Most experts however, expect that the Florida real estate market is now hitting the bottom and the properties’ sales rate will begin to increase starting in 2008.
Despite the current problems, most investors and construction companies point that Florida still remains an excellent retirement location. As the generation of baby boomers inevitably enters the retirement age, the Florida real estate properties will be more and more often sold. While many buyers are now postponing the purchases due to high property prices, they have never resigned from Florida as the place to move to for the retirement. As the result, even the smallest price drop may trigger an increase in the Florida real estate properties’ sales rate and end the slowdown. If such thing happens, it will put the whole Florida economy back on its track in a few months, as the construction industry and the consumer goods sector will power up to meet the real estate industry and buyers’ needs.