I love a deal, don't you? I'm not simply talking about finding something cheap. I'm talking about finding something of quality that will endure the test of time and hold and even increase its value. It doesn't matter if it's a fine piece of furniture or a piece of real estate. It needs to fit my criteria.
When working with buyers, my goal is always to find the best deal. This doesn't always mean the cheapest price. This is a really hard concept for buyers to understand. You must look at the big picture and see where the true value comes into play.
I'll give you an example. Mr. and Mrs. Buyer are looking for a home in a certain price range and are considering only foreclosures. Why? Because they feel these are the best deals out there. Well, that's not necessarily true. There are so many variables to consider when determining if the property is a good deal and understanding all these factors is imperative.
If you are looking at this investment in the long-term (over 5 years), then it is wise to consider the following:
Is the community seeing a disproportionate number of foreclosures? If so, you'd better understand the consequences with regard to financing. Fannie Mae is flagging declining markets and that home you think is a steal, your lender may think is a clunker! It won't do you any good to invest in a community if your lender isn't on the same page.
Is the home in need of serious updates or repairs? Many foreclosures might be in disrepair and will require some serious investment of time, energy and resources to bring it up to par. If you can get past the lender for approval, have you considered the cost and magnitude of what you are facing? Roof, windows, siding, appliances, flooring, baths, plumbing, electrical, HVAC….these can be very high dollar ticket items. Price your repairs before you make that offer. Then understand that it will take you a considerable amount of time to recoup that investment in the form of appreciation of equity. The more you spend to improve the home, the longer you may need to be there to see your equity increase, as well.
Is the home on a bad lot? Consider a gorgeous home. It has everything you want inside – gourmet kitchen, beautiful flooring, lovely floor plan, even great schools. But is the lot backing up to the train tracks or a 4 lane road with high traffic volume? Is it on a main road that is destined to be widened? There are a lot of things we can do to change or improve a home's condition. We can even do significant landscaping to add privacy and curb appeal. Recognize what you can change and what you can't before you invest in the property.
Are there environmental factors to consider? As indicated above, noise pollution can contribute to the fact that a property doesn't sell. So do things like water treatment facilities, airports, landfills, wetlands, etc. You can find the perfect home on the perfect lot but If it backs up to a waste management facility, your summers may be spent indoors because of noxious smells!
These are just some of the most obvious points to remember when you are considering purchasing a "DEAL" in real estate. Remember to use an agent who will give you 100% fiduciary duty and always put your interests first.
Irene Morales Ward is an experienced and exceptional Realtor® representing clients in the Northern Virginia area since 2001. Irene's expertise in the field of agency and fair and honest client representation is recognized by her past clients' testimonials and is the driving force that continues to inspire her to exceed her clients' expectations.