Home ownership is one of the great American dreams. Roughly 64% of all Americans own their home, and many consider that home their greatest investment.
If you are considering buying a home, congratulations! It can be a very easy and rewarding process. Making sure that you are working with a good lender and real estate agent are key components of a smooth process.
One of the most common questions asked by buyers is “Is this a good deal?”. There are many factors to consider in answering this questions.
Does the house meet your needs?
In determining whether the home is a good deal, you should always consider your needs for a home. It’s a good idea to make a list of home features that are a “must”, and a separate list of features at are “wants”. If the home you are considering doesn’t have all the features in the “must” category, then it may not be a good deal for you or your family.
Is the house in the right location?
The average American travels 16 miles to work each day, and spends approximately an hour on the commute round trip. Location is key when choosing real estate. Many people choose a home based on it’s location to schools, work, or urban areas. These are all factors to consider when deciding if a home is a good deal for you. Decide how far you are willing to commute each day, and ask your real estate agent to only show you homes within that distance. If you know that you don’t want to be inside city limits, make sure you tell your realtor that information. Real estate agents have search tools available to fit any criteria you give them. So, save yourself some time and make sure you communicate your location criteria clearly.
Is the house priced right?
This is the last factor we will discuss when considering if a home is a good deal. To know if the home is priced right, you and your realtor should discuss the following:
What is the market value?
Basically, the market value of a home is what someone is willing to pay for that home. Your realtor can show you recent home sales in the area, so that you can compare price and features. Market value is more a range than a specific number, however. So keep that in mind when determining value.
In evaluating the comparables, you should consider sold homes instead of active listings, as this gives a more accurate market value. Also, the closer the comparable home, the better. Staying in the same neighborhood when considering value is a plus. In rural areas, it is best to find comparables within 3 miles of the subject property. Lastly, consider homes sold in the last 6 months as good comparables. Markets change, sometimes rapidly, and older comps may not be reliable.
Because each home and lot is different and unique, there are a few other factors to consider when determining value.
Regardless of what a good deal you may think a home is, if it is outside your budget, it isn’t a good deal for you. Make sure you talk to your lender before starting your home search, so you have assurance that you are shopping in the right price range. A good deal is one that you can afford.
Another factor to consider is how much work you will need to do in order to make the home what you envision it to be. Big ticket items to consider are heating and air replacement and roof replacement. Other things to look at are carpet and paint updates that may need to be completed. Sometimes, repairs can be negotiated as part of the contract, but not always. Make sure you talk with your realtor about any items you think need addressing before making an offer.
What are market conditions?
One last consideration in determining if a home is a good deal is forecasting the market. Ask your agent what the forecast is for the upcoming years in your area. Knowing how long you would need to keep your home before you could sell and make money or break even should be a consideration. Of course, forecasting is only an estimation, because no one can predict the future. But, it should be a discussion item.
There are many factors to consider in determining whether a home is a “good deal”. I am always available to answer questions about the home buying process, so don’t hesitate to reach out if you need assistance.
Gina G Buck, Broker, ABR, CRS
- Address10203 Holtville Rd
Deatsville AL 36022
Don’t Pass the “Buck”
Putting real people together with their real estate dreams for over 15 years.