The only 2 reasons to be in investment real estate
Real Estate Monkey | October 24th, 2011 - 3:37 PM
How to Get Top Dollar for Your Home
Real Estate Monkey | August 24th, 2011 - 11:01 AMAccording to studies done by the NAR (National Association of Realtors), most homes sell within the first 60 days of being listed. Homes on the market longer than 60 days usually result in larger reduction in price than comparable homes selling in less than 60 days. Therefore, it is imperative that you, as a Seller, create the best presentation of your property to the Buying community from the onset to increase the chance of a sale and the amount of money you receive for it as well.
Below are 5 key factors to increase the amount of money you receive for your home and decrease the amount of time your home spends on the MLS.
Pricing Factor. It is very important to price your property at a competitive market value right when you list it. The market is so competitive that even over-pricing by a few thousand dollars could mean that your house will not sell. Here are reasons for pricing your property at the market value right from the start in order to net you the most amount of money in the shortest amount of time. An overpriced home:
- Minimizes offers;
- Lowers showings;
- Lowers agent response;
- Limits financing;
- Limits qualified buyers;
- Nets less for the seller
80% of the marketing is done when we decide on what price to list your home. If you are unwilling to list at current market value, you would be better off not putting it on the market at this time. Homes listed above market value will also cause potential problems in the future even if you lower the price after the magical 60 day mark. Buyers may look at a sudden price drop to mean:
- Highly motivated Seller trying to dump his house;
- Now known defects in the house that were unknown prior to price drop;
- Desperation to sell caused by financial pressure;
- Plus many more…
Clean Factor. Most people are turned off by even the smallest amount of uncleanness or odor when buying a home. Sellers lose thousands of dollars because they do not adequately clean. If your house is squeaky clean, you will be able to sell your home faster and net hundreds, if not thousands of dollars more. If you are planning on moving, why not get rid of that old junk now so that your house will appear larger? Make more space. Odors must be eliminated especially if you have dogs, cats, or young children in diapers or if you are a smoker. You may not notice the smell, but the buyers do! Most agents have a difficult time communicating to their sellers about odor. If you employ an agent to get the most amount of money for you, please don’t take offense if he must confront you about odor problems.
Access Factor. Top selling agents will not show your home if both the Key and access are not readily available. They do not have time to run around town all day picking up and dropping off keys. They want to sell homes! The greatest way to show a house is to have a key! When your home is being shown, please do the following:
- Keep all lights on
- Keep all drapes and shutters open
- Keep all doors unlocked
- Leave soft music playing
- Take a short walk with your children and pets
- Let the buyer be at ease and let the agents do their job
Paint & Carpet Factor. Paint is your best improvement investment for getting a greater return on your money. Paint makes the whole house smell clean and neat. If your house has chipped paint, exposed wood, or the paint looks faded, it is time to paint. If your carpet is worn, dirty, outdated, or an unusual color, you may need to seriously consider replacing it. Many houses do not sell because of this problem. Don’t think that buyers have more money than you have to replace carpet. They don’t. They simply buy elsewhere.
Front Yard Factor. Your front yard immediately reflects the inside condition of your house to the buyer. People enjoy their yards. Make certain that the trees are trimmed so the house can be seen from the street. Have the grass mowed, trimmed and edged. Walkways should be swept. Debris cleared away. Remove parked cars. This all adds to curb appeal. If a buyer doesn’t like the outside, they may not stop to see the inside.
I am sure there are plenty of other items that you can add to this list and it is no ways meant to be exhaustive. These are the top 5 key factors that I use when helping my client establish a listing price and a marketing plan for their property.
7 Uncontrollable Things That Effect Real Estate Value
Real Estate Monkey | August 17th, 2011 - 8:10 AM1. Neighborhood Decline
The surrounding community can change in a variety of ways that adversely affect your income property. Increasing vacancy, for instance, can lead to reduced rents, which in turn means reduced maintenance causing building deterioration, in turn causing the whole neighborhood to slip into decline and therein triggering a domino effect that simply compounds the problem. The nearby construction of facilities such as sewer treatment plants and airports will also likely have an adverse effect on the area. Also, perhaps more subtle and slower in coming, is a decline due to increased crime, perhaps resulting from an adjoining neighborhood spill over.
2. Impact of Adverse Infrastructure
The impact of being directly under the flight path of aircraft, for example, can have a negative impact on a property’s ability to attract (or keep) tenants. Likewise, construction of a major highway or intersection can limit access to the property, and cause noise and dirt by the construction to drive tenants out. Perhaps the result may be an increase in your investment real estate value, but construction can take up to a year or more and during that time you can expect your real estate investment value to drop.
3. Controls and Regulations
Governmental controls and regulatory changes to zoning can adversely impact real estate investment property. Real estate investors that purchase raw land for development, for instance, can see their plans grind to a halt because of a building moratorium or anti-development sentiment. All of which, of course, results in a plummeting value.
4. Wear and Tear
Sooner or later things like air and heating equipment, roofs, electrical and plumbing, hot water heaters and boilers wear out and require maintenance and/or replacement. If not properly maintained, the value of the investment real estate is reduced by the economic obsolescence (out-of-date) items.
5. Supply and Demand
Two major factors of supply and demand causes real estate values to go down: overbuilt and tight money. Overbuilt is straightforward. With multifamily property, for instance, overbuilt would imply that there are many more apartment units available to rent than there are tenants to rent the units. In this case, when new construction gluts and an overbuilt situation occur, the market can decrease quickly and stay down for a long time. Tight money means less availability of long-term financing from lenders and therefore less qualified buyers for your rental property.
6. Lack of Proper Maintenance
A run-down property in the neighborhood, if left unchecked, could drive down the values of all adjoining properties. A deteriorating property, whatever the reason, will have an adverse affect on your real estate investment.
7. Pressure to Sell
Smart investors are always on the lookout for property owners who have a strong motivation to sell, and perhaps even, reduce a property to bargain basement prices. Always try to avoid ever reaching the moment when you are forced to sell.
Here’s to your real estate investing success.