July 2019

Size Matters

If you want to rehab a house, what size and price house would you choose? Have you watched the TV show about real estate agents who sell to the rich and famous? Well, do you have contacts to the rich and famous? Do you have the money to fix up a house that size? The larger and the higher end the house, the more money you need to put in to make money on the back side when you sell.

Traditionally, you don’t want to even buy the largest house in the neighborhood even if it isn’t a mansion. Why? Because the average price of the other houses will hold down the price of the larger house. If that same house were in a neighborhood with larger houses the same size as it, it would sell for more.

In addition, there is a limited market for the large homes. Just not that many people can afford them. By going for the average price home you have a much larger market of people who will be interested in buying. That also means you can probably sell faster which is important because there are holding costs involved. The faster you sell, the lower the holding costs and the more profit you make.

What you want to do is find out what the average home price is an area and look for a house that would be worth that fixed up but you can get for a discount because of some problem, whether that is repairs needed or foreclosure or something else. You want an average house with other average houses nearby. Below is just one example.

Repair Estimates

If you are in a trade and doing a rehab then you probably know the prices pretty well already. However, if you are fairly new to rehabs, you need to get an idea of what repairs will cost. That is important for you to know before you bid on a property.

Find 2 or 3 contractors. When you are trying to figure out your bid, have them come in and give you an estimate. This will help prevent you from losing money by bidding too high on a property and then finding out that by the time you have finished rehabbing you have spent more than what you can sell it for. Not good. A saying in the rehab business is that you make your money when you buy not when you sell. In other words, you have to buy right.

On your first rehab, ask the contractors what they would do to fix it up. Make sure you walk through the house with the contractors and talk to them and ask questions. Each will have different ideas which you can pick and choose from. The only problem is that you will get estimates that are hard to compare because they contain different tasks.

After you have done one or two and know what repairs you want done, you can give them a list of repairs to be made and each will have the same list so you can compare one to the other more easily. Still be open to suggestions they may have for you. They could save you money with an idea or suggest something that will increase the attractiveness of the house and therefore the sale price.

Whether you’re selling a home or buying one, it is in your best interest to get the help of a real estate agent. Choosing the right real estate agent is a vital part for the success of your marketing or buying process. You need to choose a good real estate agent that will represent your and interests well during the transaction process. With many companies out there filled with agents who claim to be the best, it can be challenging to find a reliable real estate agent. There are mistakes which are common among agent seekers, and it is best to avoid them at all costs. If you want a reliable agent that will ensure a smooth transaction, avoid the mistakes below.

Hiring the Cheapest Option

There are real estate agents who will undercut the competition by lowering their competition so as to win the bid. Basing your decision on the commission rate solely is a mistake. Agents use their money to market and advertise a property which can be expensive in the long run. Similarly, a buyer’s agent has to collect important information and attend negotiation meetings, which require money. If your agent quotes a low commission, it means there will be less money to market your property. It is therefore important to go for the best option instead of the cheapest option. 

Hiring a Part-Time Agent

There are agents who have devoted their entire lives to helping people buy and sell the property. Such agents are the ideal ones to work with. Choosing a part-time agent to help in buying or selling your property is a mistake to avoid. While part-time agents can be a cheaper option, you are likely to suffer long-term damages due to their misgivings. Home investment is a huge investment and you need an agent that is committed and readily available to help. 

Basing On Emotion Rather Than Skill

Buying or selling a property is a serious business. Hiring an agent based on friendship or family relation does not give you an advantage. Your friend may not see the need to work hard because you can easily forgive his smaller mistakes as opposed to a stranger. Take a look at their track record along with the credentials before selecting the agent to work with.

Assuming All Realtors Know the Same Things

It is a mistake to think all realtors are the same. Every real estate agent has their own experiences and knowledge. This is why some realtors are at the top of the chain while others are at the bottom. Hire a reputable and experienced agent who is a member of the National Association and suits your needs. 

Choosing the Agent That Has Sold More Homes

Some may be tempted to believe that the best agent is the one who has sold more property than anyone else. To determine the best agent, you need to choose for the one who completes the sale, negotiates the most favorable terms, does proper marketing and communicates with you whenever necessary. It may not be the highest selling agent. 

Choosing the Agent That Agrees With Your Pricing

An agent who agrees with your price without any considerations is not an expert. The right agent will be honest with you and tell you the true value of your property. This is will help you use the right price to sell your property. No one wants their property to spend months on the market before it’s sold.