As the old real estate adage goes, “location, location, location”. That seems to be the first thing that realtors point to as having an effect on home sales. But the location that is good for one home Buyer is not necessarily the first thing on the list for others. Your lifestyle will likely be the key Factor in deciding what a good location means to you. You may be trying to find a home that is within a comfortable commute to work. For someone else, being close to good schools is a higher priority and they may be willing to commute a little farther if they can’t find something that fits both their proximity to schools and to work. For most people, being close to shopping and social or recreational areas are a huge plus when looking for a home. This is evidenced by the population of areas with those services, and also the price of the homes listed in these areas. While it is possible to find bargains in popular areas, the prices tend to be higher than in areas that are less desirable.
Some people prefer a quieter more rural location which usually means that services will be fewer and farther apart. But if living away from it all fits your lifestyle better, then it won’t matter as much to you that you may have to commute to shop because you have purchased in the location that is important to you.
Comparable to location, the price is a Major factor when choosing a home. Very few people in this world have the income that allows them to purchase a home without consideration of cost. Most people have a limit that their lender puts on them or a limit they impose upon them by the amount of cash that they have to purchase a home. Some people choose to max out their limits by looking for homes that are priced at their maximum. Others choose to keep their home costs on the conservative side of their red line.
Something that factors in when taking out a mortgage on a home is the interest rate when they are purchasing. Banks factor the amount that you will be paying in interest into your monthly mortgage payment and this decreases the amount of the mortgage you will be able to take out. More homes seem to sell when interest rates are low than when they are high, as people will be able to get more for their money. However, this may not matter as much in times of economic strength, either personally or in the country.
The condition of the home is also a huge factor in how it sells. If it is priced right, even a home in disrepair is likely to get sold as there are always people who would like to make profit fixing up a property thereby increasing the equity that they have in the home. Most people want to buy a home that is “move-in ready”, although the definition of move-in ready varies from buyer to buyer. Some people want to be able to turn the key and move in, knowing that there is nothing at all that they need to do to the home. This is one reason that newly built homes are so desirable. Some people don’t mind putting a fresh coat of paint on a wall or changing out a carpet and feel that those things do not have to be done prior to moving in and so in effect, they are also buying a move-in ready home.
If a homeowner has made upgrades in the home prior to listing, the home can both increase in value and sell faster. Some upgrades, such as a remodeled kitchen or bathroom add significant value to the home, while others, like a fresh coat of paint or updated light fixtures, will only help the house to sell faster.
After an offer is made on a home, the inspection report then becomes an important factor in whether or not the sale goes through. If there are items on the report needing expensive repairs, or even just items that make the purchaser nervous to buy the home, the deal may fall through. If the home is under contract, the purchase price of the home may be negotiated down to allow for repairs.
Comparable properties or “comps” in your neighborhood also have an impact on the value of your home. When pricing your home, your realtor will look at other houses in your area that are similar to yours to help them price your home. If you are in an area where there has been a lot of foreclosures, your home price, unfortunately, will decrease. If you are in an area where home prices are on the rise, your home will also reap the benefit of an increase in value. Comps are important because they are one of the key factors in appraising the value of your home for your lender. Following a structured process, the appraiser will look at comps in your area to establish a price which they then either lower or raise depending on condition or upgrades that you may have made in comparison to other comparable properties.
There are a lot of other factors that go into home sales. If a major employer leaves or comes into the region, home sales and the prices they bring will either go down or come up. There have been times where whole towns virtually disappear if a major industry leaves the area, taking with it employees who then have to try and sell their home in a market with a huge supply of homes for sale and no incoming employees to buy the homes. On the reverse side, if a major employer comes into an area, home prices tend to increase because the demand outweighs the supply.
Other factors include traffic in a certain area, proximity to airports and their associated noise, crime, zoning laws and proximity to parks and playgrounds. Everyone has their own list of features that are important to them that they look at when buying a home. While the layout and number of bedrooms are important, these other factors also play a large role in a buyers decision to purchase a particular property.