The one thing you can do today to help increase your success in buying a home is to first “Identify the Neighborhoods You’re Interested Living In” then break it down and start to identify the trends, indicators and comps by gathering the following information below. Do this for all the neighborhoods you’re interested in. When you do this today you’ll start to gain the knowledge and have an advantage over other buyers when placing your offers.
- Average List to sale price ratio of a neighborhood: The list to sale price ratio of a neighborhood will give you an idea the average amount homes are selling for based on the list price. This is important because it’ll give you helpful information when it comes to putting together an offer and negotiating price.
- Average Days on Market (DOM): This is the average amount of days a home actively stays on the market before going into contract. By understanding the average DOM for a neighborhood you’re interested in you can pinpoint homes that has been on the market longer and use that to your advantage when preparing and negotiating an offer for that home. Usually when a home has been on the market more than the average it’s because the home is overpriced.
- Average amount of offers: Putting in the work and finding out what is the average amount of offers homes in a certain neighborhood are receiving is a key piece of information that many buyers are not using to their advantage when it comes to placing an offer. If you came across your dream home and knowing in that neighborhood most homes that sold received an average 10 offers just knowing that I’m sure you’ll be a lot more aggressive in your offer because you wouldn’t want to miss out on the chance of losing your dream home.
- Average price of homes are selling for in the area
In a neighborhood homes are usually broken into three categories:
- Needs remodeling/TLC
- Some remodel completed
- Fully remodeled home
And because of this it’s natural that there will be price differences between the 3 categories of homes in a neighborhood. When you understand the price difference between the homes you can better present an offer to reflect the type of home your placing an offer for. When you dig deeper to find out why a similar home sold for less or for more in the same neighborhood image how much more confidence that will bring you when determining your offer price.
A home that has been fully remodel will be far more superior in price than a home that needs remodeling. For example… Have you ever saw two similar homes on the same street, same size, same floor plan and saw that there was a big difference in price. For most buyers they would assume the home that sold for higher was probably because the buyer over paid for the home. And based on that assumption the buyer of course doesn’t want to over pay so they put more weight on the price of the home that sold for less. Only to find out the offer price that was accepted was closer to the price of the home that sold for higher. Why because the home that they put an offer on was also fully remodeled and the home they based their offer price on was not. If they did a little more research they would’ve discovered the real reason why the home sold for more.
There are several ways you can go about finding out the needed information to help breakdown a neighborhood and really understand what’s going on with housing market in your specific neighborhood.
- Using the Realtor your working with is the easiest. They can gather the information for you.
- If you want to do the research on your own then several online real estate websites available: Here are the most common sites that buyers use Realtor.com, Redfin.com, Zillow.com. Out of the three Redfin seems to provide more detailed information such as average amount of offers for a neighborhood.
- If you don’t have a Realtor and don’t want to do the research. You can contact a realtor who does business in your specific neighborhood. They should be able to help you.
Now that you have an understanding of what you can do today to help increase your chances into homeownership. Start by identifying the neighborhoods you’re interested in that’s within your budget.
For any questions please feel free to contact me and best of luck to you.