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March 06, 2015

Are you trying to invest on the right property? You better be, but no fast. Regardless of whether you are looking for a house or selling the one you are currently living in, it would be wise to arm yourself with the right knowledge. Here are some of the ‘new rules’ in buying a property according to the book published by Zillow.com, the biggest online real estate database.





1 The Starbucks effects. Let’s say you are faced with two identical homes. On average, one house may be sold for $168,000. However, if the property is located next to a Starbucks, the price will skyrocket to $269,000. Yes, a Starbucks is a great indicator of ongoing development.

2 House prices are overpriced. A listed property can be overpriced by more than 15% of its estimated value with an average of 6.9%. When attracting potential buyers, the properties selling prices are offered for 15% less, which is basically their actual selling prices.

How to become successful in Real Estate investment?
3 Right wordings do the trick. Carefully chosen words in the listing can affect the sales. Words such as unique, nice, potential and investment lowers the property prices by 7% while words like captivating, impeccable and luxurious increases the value of the property by 8.2%. More detailed (and thus longer) listings are sold at even higher prices.

4 Terms also depict dimensions. Home listings that used the word cute average to 1,128 sq. ft., quaint average to 1,299 sq. ft. and charming average to 1,487 sq. ft. These terms are code-words which basically mean ‘small’ which basically exclude families with 2 or more kids in the buying process.

5 Names also matter. Properties with the lowest home values are those with Street, Boulevard or Road on their names. The values are around $183,120. On the other hand, properties which include the term Way, Lane or Court has the highest home values at approximately $312,000. More unique names do much better in terms of resale value. Descriptive words are always better. Nonetheless, even if the address has the word street on it, it can still sell higher than properties that have number streets. Names often have higher values than numbers.

6 Right timing is equally important. For example, the best time to list is mid-March when homes sell more (additional 2%) and faster. The worst time to list especially in New York is on the 2nd week of December during which homes are sold for 2.8% less of the average price of the property. Further, if you are living in colder cities, consider listing by mid-April. For warmer cities, it is best to list on the 1st week of March.

7 Homes are state-dependent, too. Buying and selling a house depends on where you are living now and the intended length of stay in this place. Buying a house in Seattle will only be financially sensible after 1 year and 9 months. It will take longer (about 4 years) if you are going to buy a house in Boston.

8 Worst home in the best neighborhood? Such a common misunderstanding, thinking that any homeowner can increase the value of the property by improving it. however, experts say the worst properties won’t appreciate that fast. Always buy the best home that your money can afford in a decent neighborhood and never consider houses in the bottom 10%.

9 The not-so-popular neighborhood. Sometimes, the up-and-coming neighborhoods that you are eyeing had already happened. The next best thing to do is find a house in the neighborhood surrounding any of these popular neighborhoods. This is called the halo effect which is very evident in cities in New York, Chicago, and Charlotte. Instead of location, location, location, think of future location as they will also become popular in due time.

10 Sometimes, it is better to rent. Buy the house if you intend to stay there for 2 years or more. But, this still depends on where you live. Manhattan, for instance, requires you to live in the house you bought for 5 years before breaking even. So, when in Manhattan, rent an apartment instead, but when in Detroit even just for a year, buy a house.

11 Numbers tell the difference. Stay away from properties that have 666 and 4. Americans regard to 666, more specifically, as bad luck, and it can decrease your home’s value by 2 to 3%. The same goes with 777 that decreases the property’s estimated value by 2.1%. Choose properties with 316 or 8. If you are targeting the Chinese homebuyers, put an 8 somewhere on the listing. Chinese regards 8 as a lucky number.

12 Entice with price psychology. Put a 9 in the listing. Properties that are up for grab for $299,000 sells faster than those that are being sold for $250,000. Such dynamic works for properties across all price points. In particular, such properties can be sold for 4.2 days on average.

13 Renovations are not created equally. The best remodel that returns the highest ROI is a bathroom remodel. For a $3,000 job, the return for every dollar spent is $1.71. The worst remodel, on the other hand, is a kitchen or basement remodel because of homebuyers’ distinct taste. For the former, a renovation cost of $22,000 will only return $.51 for each dollar spent.

14 Another story would be great. If adding a level, go up. Never go down; basements won’t be appreciated that much anyway. Also, basements are often converted into another, more functional room. A story increases home value by $1.02 for every dollar spent.

15 Gender matters. When buying a house, choose a female property broker. When selling a property, look for a male agent. The difference? Women are more willing to negotiate than men. Men usually stick to the asking price while women are more flexible in terms of lowering prices.

Now that that property buying, selling, and listing myths are debunked, this is the perfect time to consider and reconsider. The real estate industry may not agree with all these rules. However, there remains the fact that times are changing and so are the perceptions of the home buyers, sellers, and even agents.

About the Author:

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Justin is a Filipino blogger and a business enthusiast. He currently blogs and writes for Arcasouth, a real estate company in the Philippines that provide condo in Fort Bonifacio Global City.
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2 comments:

  1. this post about the real estate property and how to buy the real estate property is genuine and informative, and tips required to buy property in real estate market...

    Investment Property UK .

    ReplyDelete
  2. Thank you for the 15 tips about real estate! I have been thinking about getting into the business because it seems like you can make a lot of money. It also helped me know how to find real estate when I just move around. http://fdrealestate.com/companyinfo.php

    ReplyDelete

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