Real Estate Questions and Answers for home buyers
Q) There’s a lot of uncertainty in the market. How do you deal with that, and how do you get your clients to deal with that?
A) Ultimately I have to create my own market. Meaning that I have to stay up to date on inventory, average price point in the markets that I specialize in and interest rates. Staying in contact with a lender that knows the business. I am up front with my clients and let them know they are in the business of buying or selling a home and they should take the facts of the market today in account when writing an offer of offering their property for sale.
Q) Which sectors are hot, and which are not? (luxury, middle-range, entry-level, condos)
A) Entry-level is a hot market. Many people that have been renting are now finding out that the amount in rent they pay can actually pay for a home they will own. Interest rates are incredible and home prices at a level that they should be if you follow history. Luxury is somewhat slower however even there you find movement due to the low interest rates.
Q) Speaking of deals, where are all these foreclosures deals we’ve all been waiting for? Are they happening, or going to happen? If so, where and when?
A) Foreclosure deals, as in bank-owned deals, are around, however the price point is not always very much lower than a standard sale. I have noticed recently that coming in low on such properties and holding firm on price actually has the bank lower the price by up to 10 percent of the list price. Don’t be afraid to negotiate but keep in mind that there are numerous cash investors out there.
Q) When the last spate of foreclosures hit Southern California, it negatively impacted many communities, creating blight in the form of unoccupied homes and uncared for communities. Are you seeing this in the Dallas Fort Worth area? If so, which communities?
A) To be honest, I have seen many foreclosures in pretty decent shape and they are off the market pretty quick. Lots of those properties are purchased by investors who flip them and bring remodeled homes to the neighborhoods.
Q) Is the bottom here, near or in another year (or more)?
A) The bottom is wherever it is. The market has been pretty stable for a while now. It goes down a little when there are short sales and REO’s coming on the market and goes up slightly when those same properties are bought by new owners or flipped by investors. The interest rates make for an active market and keeps things moving.
Q) I have to make a choice between an updated home in an older neighborhood or a newer home in a more modern neighborhood. The home in the older neighborhood has almost everything I want and is much larger, but which makes the most sense as an investment?
A) If your goal is to buy a home for its resale value and the one you are thinking of buying in the older neighborhood is at the upper end of values for that neighborhood, then it may not be the wisest choice. If it is similar or lower in price to the others, then there should be no problem, because pricing should be considered in relation to the local neighborhood and not compared to homes in other neighborhoods (for the most part).
Plus, is it a neighborhood on the decline, or are others going to be fixing things up, too, so that it is a neighborhood that is improving? It could turn out to be a very good deal as long as you don’t “overpay” because of the recent improvements.
Remember that you also buy a home for it’s value to you as a “home,” and that is something else you should consider. Which neighborhood would you AND your family feel most comfortable in?
For more specific information on buying a home for its resale value, call 469-446-8971.
Q) When buying a new home, what upgrades should we go for? What holds the most value? Do we upgrade the lot? Pick more square footage in the house? Add an extra bedroom?, etc.
A) A lot depends on why you are buying the house. Are you buying it mostly as a home or mostly as an investment? There is a difference.
For the most part, upgrades are high-profit items for builders. They aren’t designed to enhance the value of the house, but make you happier with the house you do buy.
If you are looking at your home as an investment, then you buy from the smaller to medium size in the tract and spend only a minimal amount on upgrades. If you are looking at your purchase as a home, then you select upgrades that will enhance your quality of living.
One rule of thumb is to always upgrade the carpet and padding.
For specific information on what to look for in a house when resale value is a consideration, call 469-446-8971.
Q) I need to buy a house with a good resale value. How do I determine if my house will increase in value within the next five years so that we can upgrade? I can buy a smaller house in a great location or get twice as much house in a good location. Which is a wiser decision?
A) It’s like buying stocks. How do you really know which ones will increase most in value over the next five years? As with any investment, there are risks.
The most often quoted rule is that location is the most important factor. You want to make sure that the house does not back to busy streets and is as close to the interior of the tract as possible. Avoid corners and intersections. Choose the middle of the block or a cul de sac. You’ll want to be sure it has at least two bathrooms (if you are buying in an older area).
Sometimes it is just timing that works out best for you. For example, if you buy a home before a major surge in local prices.
Q) Can you negotiate the price of a bank owned home?
Everything in real estate is negotiable. However, banks are more sophisticated about pricing than they were years ago. So those “Get a great deal on a foreclosure!” days aren’t what they used to be. Lowball offers generally don’t go very far.