Value Cost and Price Are the Key

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Research is vital prior to purchasing a home. Dottie Herman, the host of “Eye On Real Estate” stresses that becoming an expert is essential to finding the right home to purchase and satisfaction with the choice. Dottie Herman, CEO and President of Prudential Douglas Elliman, emphasizes three most important facets when purchasing a home which center on worth. Value, cost and price are the keys to a solid investment and successful purchase of a home.

Ms. Herman stated that the first step in buying a home is to hire a qualified real estate broker. Find a broker who understands the market and what you are looking for in a home. A quality real estate broker will help you find a property that suits your needs and is a solid investment.

Value

Herman stated, “It’s an opinion of what you think the home is worth, based on how you are going to use it.” Value is different for every buyer. Some home buyers may need to be close to good schools while others are seeking public transportation. The value is designated by the buyer’s needs.

Cost

Herman replied “Sellers believe that the cost of the house is what they paid for it plus all of the improvements and the money that they put into it. Cost is a measure of the past. Cost and value are not what the price of the home should be or shouldn’t be.”

Sellers who have made improvements to the property are adding value but not cost to the home. A buyer who desires a renovated home will be willing to pay more due to the value of the renovations.

Price

Herman responded to a question of determining price by stating, “Price is what the home should be worth today. Some people don’t price it right, so what you really want to look at is fair market value.”.

Fair Market Value

Determining fair market value revolves around what the property is truly worth in the current market conditions. Your real estate broker is best equipped to relay that information to you. A necessity in purchasing a home and determining price is to locate sales of homes in the area over the last six months. Ms. Herman opinioned that “brokers price opinion will vary from home to home depending on a few factors.”

Wear and Tear

Two identical homes built by the same builder in the same time frame will look dramatically different in 10 years. A buyer must go inside the homes to see how well the property was maintained. A quality real estate broker will be able to narrow down choices to well maintained properties.

Neighbors

A neighboring property that has not been maintained well will affect the purchase price of surrounding homes. Your real estate broker will have gone out to look over the neighborhood to determine if problem homes are in the area.

View

A home with a view is more valuable than one without a view. Ms. Herman stated that ”You can always find a home, but you can’t replace the view.”

Location

Good schools are as important as a view to most buyers. Researching school districts will help narrow the search criteria for a good location for a home purchase. Ms. Herman is adamant that ”It’s most important to go look at the properties, along with the surroundings and the neighborhood to know what value and price you are looking at.”

Your real estate broker will narrow down possible properties for you but researching your options is vital. Ms. Herman reiterates the need to “eyeballing properties yourself.” Every home has positive and negative aspects that result in value changes and Ms. Herman remarked “there is no exact science to pricing.”

Megan Gates is an active blogger who provides written work pertaining to home improvement, the latest architecture, design and fashion.  She also writes on behalf of Elliman Real Estate.  Follow her on twitter @MEGatesDesign.

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