by Dan Krell
“Home buyers want location, quality, and value.”
Everyone has been talking about bargain real estate for many months now. However, are these bargain homes really selling? If you look on the local MLS, there are presently twenty four single family homes listed in the county priced under $250,000. Of these twenty four homes, approximately 16 of these homes are short sales, 6 are bank owned, and 2 are being sold by the resident. It sounds as if there are a lot of great bargains available, but if you take the time to read the MLS listing and walk through the homes, you realize that these homes may be cheap, but they are no bargain.
Although a short sale (when a home owner sells for less than what they owe their lender) could be a great opportunity to get a bargain home, the obstacles are many and the purchase can be needlessly complicated by the real estate agent who does not know how to manage this type of transaction. Buying a bank owned home (foreclosure) could also represent a home buying bargain; however once inside the home you may realize that the cost of acquiring and repairing the home can exceed the purchase price of neighborhood homes for sale that are in move in condition. The many bank owned home auction events (many of these foreclosures are unsold MLS listings) are an indication that most home buyers feel that a cheap home does not represent a bargain.
So if “cheap” isn’t selling, what is? Unlike the recent the seller’s market when a “tear down” rambler next to the train tracks attracted a bidding war, today’s home buyers are back to basics. Home buyers are looking for a combination of location, quality, and value.
Location, location, location. Yes, the clichéd saying always had meaning, but for various reasons (including gas prices) a home’s location is more important than ever. Whether it’s the local amenities, proximity to Metro, or both- some neighborhoods always seem to be in demand.
When you compare your home to other neighborhood homes, does your home have a superior or inferior location (consider physical location and proximity to amenities)? If your home has a lesser desired location, you might consider making an adjustment in the listing price.
Don’t under estimate the home buyer. Home buyers are savvy and they desire quality and value for their money. Often times, renovations and updates that are completed cheaply repel potential home buyers- mostly because of poor craftsmanship. Needless to say, uncompleted do-it-yourself projects have the same effect. New appliances and carpet make any home look better, except when you choose to buy the cheapest available. Thinking that home buyers won’t know the difference in quality is erroneous. If you look at the recent neighborhood home sales, many are likely to have had quality updates and renovations. If you decide to make updates to your home prior to listing, do it tastefully with a mind for quality. If you cannot, then consider not making updates but adjusting the listing price.
Although price is always at issue, it’s not always the “cheap” home that sells. Some home buyers may make sacrifices in location and quality; but the reality is that home buyers want value for their money.
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 26, 2008. Copyright © 2008 Dan Krell.