When it comes to buying or selling your home, it can be difficult to get into the right business mindset. One of the most important aspects of buying or selling a home is coming out with a successful deal, but how can you achieve that? In this U.S. News & World Report, Devon Thorsby provides key strategies from real estate investors so you can make your personal investment a success.
Assess the risk. Before you spend your savings on a down payment and lock yourself into monthly mortgage payments for the next 15 to 30 years, assess the chances the property will be worth the purchase price when you decide to sell.
Look at the home you’re purchasing in the context of the bigger picture: the city, neighborhood and even the traffic near the property. And if the property is affected by negative factors while you live there – maybe it’s in a declining neighborhood with an increasing number of vacant houses or the county decides to take a piece of your property to widen a road – are you able to take the hit on your home’s value?
Know the market. To calculate the potential risk factors involved with the home you’re considering, you have to know and understand the local market – or bring in someone who does.
Because you’re not in the business of buying and selling on a regular basis, having a real estate agent who can explain the nuances of homes and values in the area is imperative to bring you to the level of understanding that most real estate investors already possess. A knowledgeable agent should provide insight on the variation in cost based on certain features, like the number of bedrooms or an updated kitchen, as well as manage expectations for a competitive pool of other interested buyers.
Be realistic when it comes time to sell. Your understanding of the market is important again when it comes time to sell your home. Regardless of the sale price you were hoping for when you purchased your home, you have to accept what comparable sales in the area tell you.
“Successful investors understand the dynamics of the local property market, so that allows them to be realistic in their expectations of what they can sell for and what they can buy for,” Cooper says.
He adds that it is important to recognize any parts of your home or the area that may not be appealing to buyers, and set the listing price accordingly to ensure the property is still enticing to them.
Your feelings still matter – but control them. When you’re making a decision about where you’re going to live, there’s no way to extract emotion from the equation – something that’s not as difficult to do in investment deals. “How do you remove emotion from one of the biggest decisions in life you’ll ever make?” Rayat says.
But being able to control those emotions can make the business aspect of the deal smoother, especially when you’re selling.
[Read the full article: Buying or Selling Your Home? Think Like a Real Estate Investor]