October 2010

It's A Buyers' Market

Author: Richard Neste

If you’re a buyer in today’s market, the following tips will help you stay on track to find the best property, in the best location, for the best price.

1. GET PRE-QUALIFIED. Interest rates continue to be at an all-time low. Sit down with a mortgage professional to figure out what price range you can afford. If you have to sell your property before you can buy the next, save yourself the time and aggravation of looking at properties that are not in your price range. Get a pre-approval letter from your lender before you start to look at property so when you find your perfect property in the perfect location, the seller knows that you mean business and that you’re ready to buy now.

2. STUDY THE LOCAL MARKET. While most buyers think they are experts in buying real estate, not every buyer has the product knowledge of the communities that they are looking in. Get market statistics from local professionals who represent buyers and sellers in the community you’re looking for to help speed up your learning curve.

3. LEARN MORE ABOUT FORECLOSURES AND SHORT SALES. Yes, these types of properties draw the majority of interest from buyers in today’s market. While every buyer wants to get a great deal, not all foreclosures and short sales are great deals. Do not discount the fact that many of the best deals in our local communities are not short sales or foreclosures. While the initial interests of most buyers are in these types of distressed properties, a buyer needs to be aware of some of the pitfalls. Working with a Realtor who is certified by the National Association of Realtors in short sale and foreclosure transactions can make all the difference. These types of transactions typically require specialized attention.

4. ASSEMBLE YOUR DREAM TEAM. Selecting the right professionals to help assist you in the buying process requires some careful planning. Realtors, attorneys, property inspectors and mortgage lenders are typically used in all transactions. Select three individuals from each field and spend some time interviewing before you get started. Not sure where to start or who to interview? Try the Internet. Google keywords that relate to what you’re looking for to do some passive research on each company before you pick up the phone. According to a 2009 National Association of Realtors survey of homebuyers, communication and product knowledge were the two most important qualifications that homebuyers looked for when selecting their real estate professionals.

If you’re a seller in today’s market, the following tips will help you sell your property in the shortest amount of time while getting the most amount of money.

1. KNOW YOUR MOTIVATION. Many sellers in today’s market are up against other extremely motivated sellers. When you’re thinking about putting your property on the market, remember the 3 Ds: Death, Divorce & Debt. Estate liquidators, ugly divorces and bank-owned properties are all motivated sellers. They care less about the property and more about the bottom line. Few sellers are in a position to compete with these types of properties, so you should really discuss the pitfalls of selling your home in an already saturated market.

2. CMA’S AND APPRAISALS. Many appraisers and real estate professionals will give you a CMA (Comparative Market Analysis) or an appraisal as a guide to let you know what your property is currently worth in their professional opinion. Now we all know that if you ask three people what your property is worth, you will probably get three different answers. To get the best estimate possible, calculate your total amount of heated square feet. Then calculate the total cost per square foot of comparable properties in your community that have sold in the last 90 days. So many people make the mistake of using old appraisals when thinking about the value of their property. An appraisal is one person’s opinion of value for the day of the evaluation. It does not mean that an appraisal from two years ago is still accurate.

3. EXPOSURE, EXPOSURE, EXPOSURE. When buying real estate, the most important characteristics are Location, Location and Location. When selling real estate, it’s all about your exposure! The National Association of Realtors has been on record saying that over 90 percent of homebuyers use the Internet to find real estate information during their search for a new purchase. The Internet is the most powerful marketing tool. It is open for business 24 hours a day and can reach an unlimited number of potential buyers all around the world. Get your listing on websites that have the greatest amount of traffic for homebuyers in your area. You will increase your chances of having your property seen as well as improve the likelihood of selling your property a lot faster than any open house or classified ad. Remember, the majority of the people who buy property in our area are not from here. More buyers are using the Internet first, so in order to increase your salability, you need to increase your visibility.

4. ONE PERCENT FOR GUARANTEED SUCCESS. This tip will not work for everyone, but for those who follow this rule, you can thank me all the way to the bank. After determining your asking price, take one percent and reinvest into the property. If you’re trying to sell your home for $500,000, take one percent of the asking price and put that $5,000 to work for you. Make sure your property has nice curb appeal. Update fixtures, paint shutters, remove any eye sores and get your home professionally cleaned from top to bottom to make sure you’re putting your best foot forward. Inventory is sky high and competition is fierce. Don’t be cheap; it will cost you more in the long run.

Richard Neste is the managing broker for Foundation Realty. The brokerage is one of the fastest growing real estate companies on Hilton Head Island and has recently become one of the top 10 companies for volume and transactions, according to the Hilton Head Island Realtors Association. Foundation Realty is located at 22 Folly Field Road. You can reach them at (843) 686-4002 or visit them on the Web at www.HiltonHeadRealEstateS.com and www.BlufftonRealEstateS.com.

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