If you're fortunate enough to be looking for a home in Center City, MN, you have many advantages on your side: housing prices are low, mortgage rates are at record lows, and inventory is high. But does that mean that you will automatically get a home for a good price? This article gives good tips on how to evaluate the investment value of any house:
Research Recently Sold, Comparable Properties
Your real estate agent is your best ally in helping you determine whether any given house is priced to high or suspiciously too low.
Check Out Comparable Properties Currently on the Market
If you find the house of your dreams in Center City, you should still take time to look at other properties like it to get a good feel for whether you might be paying higher than market prices.
Look at Comps that Were Recently on the Market But Didn't Sell
This information is as valuable as the prices of comparable homes that did sell. If many homes are listed at $400,000, you might believe that the house you like is indeed worth $400,000. But if only two of them sell, they're all likely overpriced. Find out how many homes like the one you're looking at in the area are being taken off the market due to not selling.
Consider Market Conditions and Appreciation Rates in the Area
It's clear that right now is a buyer's market, but conditions may vary city to city and even neighborhood to neighborhood. Track whether actual sale prices have been going up or down in the area where you're looking.
Are you Looking at a FSBO Property?
You should expect the price on a for-sale-by-owner property to be a bit lower than average, but there's also the distinct possibility that the owner has overpriced his/her property relative to actual market value. Trust your realtor to help you determine whether the comps you're looking at are truly "comps".
What is the Expected Appreciation for the area?
It's hard to say exactly when the market will begin to improve, but nearly all analysts believe it will. Some areas of Center City will improve at a faster rate than others for market value, so consider future appreciation rates when considering the investment in a home.
What is your real estate agent's opinion?
As previously stated, your agent will have loads of experience with analyzing comps - past, present and future. If they feel that the price is fair for the market, it probably is.
Does the Price Feel Fair to You?
You have to live in the home and be happy with what you paid. You don't want to miss out on a good opportunity, but you also don't want to live with regret. Be sure that the price is right for you, not just for the property.
Test the Waters
A seller may have listed at the lowest possible price to which they will go...or not. Most sales involve some negotiation.
Get an Appraised Value and a Home Inspection
Lenders are careful these days to not loan more than the actual value of the home. And a home inspection will give you a good feel for whether there are many repairs that need to be made to the house, all of which can be used to negotiate the price.
Knowing how homes are priced can help you determine whether you're getting a good price on the Center City, MN home that you love!
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