By Megan Gates
Buying a new home is a big investment; therefore, you should make sure you research the topic before signing the contract. Dottie Herman, CEO and President of Elliman, the largest New York real estate services company, always says that you need to “become an educated buyer.” It is important to become knowledgeable in the real estate market, so you will be confident in your decision to purchase a home.
On a radio show titled ‘The Art of Negotiations’, Dottie talked about the three most crucial features of purchasing a home. She summarized value, cost and price; the three parts that determine the ‘worth’ of the home.
To help prospective buyers determine the value of the home, Dottie wanted buyers to understand if a property is worth the list price, and she wanted them to know how to decide the right price to offer on a home.
Before beginning to tackle the real estate market, hire a real estate agent. Search around and look for a knowledgeable agent in your area that understands what you want in a home.
After you have hired a agent, decide what qualities you want in a home. When looking for a home, Dottie provides the following as the most crucial aspects to consider.
Value
Dottie says, “It’s an opinion of what you think the home is worth, based on how you are going to use it.” Your lifestyle will influence how the value is determined.
Cost
Dottie says, “Cost is a measure of the past.” Therefore, she feels that the cost of the property is what is was paid for in addition to the improvements that were made after the home was bought.
Price
Dottie describes price as, “what the home should be worth today. But sometimes people don’t price it right, so what you really want to look at is the fair market value.”
Fair Market Value
Your estate agent and researching other similar properties can help you determine the fair market value.
Wear and Tear
You can compare two identical homes to determine wear and tear. When buying a home, you need to evaluate its current condition to see how it has stood up throughout the years.
Neighbours
The value and price of the home can be influenced by other properties in the neighborhood, so your agent will research other properties.
View
A beach view or a mountain view will affect the value of the property. Dottie always says that you can find a home, but you cannot replace the view!
Location
Where your home is situated determines the value. It might be located near a school or near numerous restaurants. Dottie believes that you do not only want to look at the home, you also want to look at the surrounding area.
After you have thoroughly researched properties and their surrounding areas, you can compare homes that you like. Each home will have various factors that will change the value and the price. Dottie says, “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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