3 Important Factors in Qualifying a Real Estate purchase
I will actually object to that notion, and I'll tell you why. Having been in the real estate business for some-time now, I have actually seen houses in which other over-riding factors, (we'll discuss momentarily) were so marginal, that I wouldn't have the house, if you were to sign the deed over to me for $1. Literally. So, while price is a very important moniker, it is far from the only factor to consider.
Tying it all together- Integrating Price, Condition and Location.
All of the above mentioned factors are important in qualifying future real estate acquisitions. Price, Condition, and Location are all inter-related factors which are going to determine how much a buyer is going to invest in the property. I like weighing all three factors in the balance to establish a market value. When all three dynamics are in order: a property is offered at a good price, in good condition, in a good location, the stars are aligned- it's like a jackpot on a slot machine.
Typically, those deals don't last long. They never seem to be available when the mainstream buyer is in the market. The stars really have to align. In reality, most situations lend themselves to 1, or possibly 2 of the factors being really enticing, compromise needed in the other category(s), then having to weigh it all in the balance to decide whether or not it will be a safe and enjoyable investment.
If the price of a property is priced low enough, and in a fair location, it might be a rational assumption that the home might be in less than updated condition and/or repairs needed. On the contrary, if a property is located in a desirable enough area, it is reasonable (for me anyway) to assume that a negotiable price (more favorable to the seller) might be expected or required for a successful buy; even if the property is not in the greatest of condition. Adversely, a less than desirable location can cause the opposite effect on price; no matter how excellent the condition, or how low the price. Location, Location, Location.
It is important to remember that each deal will have unique elements which will determine its legitimacy. A purchaser's goals and needs will always be foremost in determining value: What's it worth to you? When considering your next real estate purchase, make sure you conduct your own independent research and have your real estate agent conduct a CMA Comparable Market Analysis of sold, pending, and active properties similar to the one which you are prospecting. Apply what you know and ask your real estate professionals input and advice on the "X", "Y", and "Z" factors; price, condition, and location of the property before deciding on whether or not; and what; if so, to offer. Thank you again for visiting my blog. I hope the ideas above are helpful to you when considering your next purchase.
Bradley V. Arnold
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