As a home buyer, you want to know that you are making a good investment. Part of making a good investment means knowing the value of a home, in the current conditions. This way, you will know when to walk away from a bad deal. Or, recognize the deal of a lifetime if it shows up.
But how do you determine the value of a home? Is it the listed price or asking price of the home? Can online estimates be used? What factors contribute? What is the best way to get an accurate value?
Zestimate does not account for location, upgrades or market conditions when determing a home value estimate.
Large real estate portal sites like Zillow have features that offer an estimated value of the home. However, these values are only estimates and do not account for some of the biggest factors of home value- like location, upgrades, and market conditions. This means that the values are not accurate, and Zillow warns that it is meant as an estimate, and that determining the actual value requires the help of a professional. Certainly, homes that have recently been remodeled with a new kitchen or other features will be worth more than others, and factors like this cannot be ignored.
Without knowing the actual value of the home, negotiations could prove disastrous. Every home owner wants to get a good deal for their money and make a solid investment. But, how can you get a good price without knowing the actual value?
Exclusive buyer’s agents accurately determine home value
That is one reason it is so important to work with an experienced buyers agent. A buyer’s agent knows the value differences in different cities, and different neighborhoods. They are able to factor in the added value that a good location brings to a home. They know how much different upgrades are worth and can analyze comparable home values with consideration for differences like hard wood floors, new kitchens, finished basements, etc. Just as important, they are up to date on the constantly changing market conditions that can make it possible to pay less than normal for a more valuable home.
The bottom line is that an experienced buyer’s agent can thoroughly examine the home or property you want to buy, compare it to recent home sales, consider location and market conditions to determine an accurate current value of the home. Armed with this information, you will enter negotiations with confidence that you are informed about your investment. That way, you can correctly know whether are paying a fair price for the home, getting a great deal, or learn that the home is not as valuable as the home seller’s would like you to think.
To discuss your home search with a buyer’s agent, fill in our find an agent form today!
The last few blogs have covered the topic about why you purchase your home- mainly as an investment or mainly for the sake of owning. My personal reasons fell somewhere in the middle- I want to make money and I want the benefits of owneship.
So, to achieve this, I took great care in choosing a home that had the potential to be a good investment, now, I am working hard at the next important phase: ownership.
To make a good investment on your home, you should accomplish the following during home ownership:
1) Keep your home well maintained: If you want to make money on your home, it should have curb appeal. It should be at its best on the day that you sell. There are some things that you can do to “get your home ready to sell”, and you should. But, it is wise to treat your home as the investment that it is- from day one. Taking care of your property will help retain its value. And beleive me, its more work than you might think 
2) Carefully consider which home improvements you make:
Some home improvements have been proven to have a better return on investment than others.
If you truly want to make money on a home, you will also need to consider what other people like in addition to what you like. Spending a fortune remodeling your kitchen could have no return on your investment if you choose a color scheme that others may find unattractive, for example.
Keep up with the Joneses, but getting too far ahead might not be as rewarding. Remember, a huge part of your homes value is its location. Improvements can only increase its value so much. I believe that the law of limited returns applies here- once you approach the maximum value for your location, you won’t see as much of a return on additional improvements.
While it is not required by law that you buy homeowners insurance in Colorado, it is required by your lender if you have financed your home. Therefore, most homeowners insure their homes. Here are some important tips to get the best coverage for you.
1. Shop around.
There are many insurance agencies offering the same coverage for different prices. Get quotes from at least 3 different companies before choosing. Don’t forget to consider your overall experience with the company in addition to price differences. In the event of damage to your home, you will want to be confident that your agent will answer questions about your coverage, and help you throughout the process.
2. Ask your company about discounts.
Many companies offer discounts if you purchase different lines of insurance through the same company, like insuring your cars with them as well. Other companies will offer discounts if you make improvements to your home that protect against damage. Examples include installing smoke detectors, installing impact resistant roofing materials, etc.
3. What about your deductible?
The Colorado Department of Real Estate Recommends that you purchase an insurance policy with the highest deductible that you can absorb. Generally, higher deductibles mean lower annual premiums. Keep in mind that in the event of a loss, it is possible that you may incur other expenses in addition to your deductible- for example, if property is damaged that is not covered by your insurance.
4. Insure for Replacement Cost, not Actual Cash Value.
This will provide the best protection in the event of property damage. Actual cash value covers the price to replace or repair property, minus depreciation. Replacement cost covers the price to replace the property with a new materials or goods that are of similar quality and materials. Many insurance policies include replacement cost coverage, but some sell it as an option. Make sure to understand your options on this matter.
Your buyer’s agent will be able to provide additional advice on choosing your home insurance and the date that you need to choose your coverage.
Last blog we talked about personal motivations for buying a home, is it because you want a piece of land and a place to call your own (and I do believe that is part of human nature), or completely monetary- you want to buy real estate to make money.
For many of us, the motivation is a blend of the two. It was for me. Growing up, my family moved several times- sometimes because of a change in my dad’s career, other times because my mom has a natural instinct when it comes to real estate and was able to make money on homes by buying them, fixing them up and selling them.
Here are some highlights of her wisdom.
Finding the right home is one of the most important parts of hoping to make money on real estate.
Ideally the home will have these qualities:
Lack curb appeal: Homes that are cosmetically very appealing tend to sell faster and for more money. This is part of the fix and flip strategy. Purchasing a home with bad paint jobs or ugly interiors tend to sell for less. Once you buy it, you can fix it yourself!
Be valued less than the other homes in its neighborhood: An important part of home value is its location. That’s an understatement. Location, location, location. If the home is valued less than the others in the area, its a great opportunity to make improvements that will attract sellers and increase its value when you sell. A home that is already the most valuable in the area may be close to maxing out its potential.
Be purchased at a price lower than its current market value: Ideally, you would be able to buy when the market is down, and sell when things are improving. Most of us will have little control over when we sell, but if you are able to wait and choose the right time, do it. Other things that can cause a home to be sold lower than its current market value are the particular motivations of the seller- if they need to sell quickly, for example.
Be in a “valuable” neighborhood: There are probably many different opinions on this topic, and please remember this is just my opinion based on what I’ve seen. I was looking for a stable community (other homes were well maintained and few were for sale), that was in a good school district. There are many, many things that affect the value of particular neighborhoods, so this is just an example.
Why Are You Buying A Home:
I beleive that there is a distinct difference in what the home buying experience and ownership will be like for a person looking to make an investment compared to the person just looking to own. In the past, real estate was a conventional and reasonably safe investment. Now, reading investment blogs and articles, many argue that it is often a better investment to rent and invest your money other ways. Of course, they don’t disagree that home ownership has many other values other than just the potential to make money when you sell. Also, many people still make money in real estate, and our buyer’s agents can help you with your investment properties and fix and flips.
What is the primary reason YOU are buying a home? Are you purchasing a home mainly as an investment? Or mainly as a place to call your own? Or, hoping to get a return on your investment on the place you call home?
Understanding and defining your motivations will help you achieve your goals.
Your buyers agent will be a great resource in helping you develop accurate expectations if you are looking more for a return on your investment. They can advise you on what types of properties to look for and what to expect in terms of renovations, how long to hold on to your home, etc.
On the other hand, if ownership in itself is the most important to you, your agent can help you define what you are looking for – both in terms of what the home already has and what the home will need.
For many of us, the goal of home ownership is a combination of the two desires- gaining all of the benefits from owning, and making improvements and caring for our property, buying low and waiting to sell high, so that ultimately we can earn a return when the time comes.
Page 2 of 29 « 1 2 3 4 5 » ... Last »
