Happy July!
I'm currently working with a buyer who purchased a property last year with a different Realtor, regretted the purchase, sold the house after owning it for less than 9 months, and is now looking for a property that better suits his needs and lifestyle. With so many things in life, you often do not know the value of working with an expert unless things go really well or really poorly. As part of my practice, I always approach each potential property that a client is interested in independently, looking at the natural light, indoor-outdoor flow, the condition of the home and the workmanship of any improvements made - while I am not a property inspector, I have attended thousands of inspections and I know what to look for and when to ask questions. I send my clients the disclosures and reports that the sellers have prepared, and once they are strongly considering an offer, I pour over the disclosures as well so we can have a deep discussion on property condition, the needed repairs, value, and much more.
There are 3 important questions that I ask buyers as we are fact gathering, and they are considering an offer:
Will this house fit your needs for the next 7-10 years? In my experience a buyer should aim to hold on to a property long term. With the closing costs associated with buying and selling, a buyer will have to sell for 10% more than they paid to break even. Additionally real estate markets rise and fall and you have the best chances of selling with appreciation, the longer you own a home. I may ask questions - such as will there be any life changes in the upcoming years, and if so, will this home be suitable?
Do you understand the property condition? The majority of the East Bay's housing stock is derived of older homes and almost every home has repair recommendations or some older systems, even the ones that are meticulously cared for. On average most homes, yes, even the pretty ones, need approximately $35K+ of repairs, plus when you are a homeowner you should anticipate maintenance costs.
Will you be excited if your offer is accepted? I always ask my clients, if you write an offer and it is accepted, will you be happy, or will you ask yourself, what did I do? Once you buy a house, you own it and it is important that you understand what you purchased, feel great about the property, neighborhood, the needed maintenance and upkeep. Additionally, if a property has challenges, it is important that you are aware of those challenges before you buy, especially if they will affect future resale value.
There is a great deal of information out there on real estate websites, various blogs, news outlets and more about the real estate market, but often that information encompasses a broad overview, it's not property or neighborhood specific, and the information may be inadequate in order for someone to confidently make such a large purchase. Unfortunately, I have met with buyers, (who I did not help with a purchase) who felt like they did not get all of the information they needed when they purchased a property and later have regrets.
Going back to my client who I am helping purchase a property who had a bad real estate experience, he is looking at a home in the Rockridge neighborhood of Oakland. The house is a 2-bedroom property and he wants to better understand values so we are reviewing comparable sold data, also known as comps. Since January, there have only been three 2-bedroom homes with garages that have sold within a 1/2 mile radius, and the prices range from $1,160,000 to $1,580,000. So to better help him, I am comparing and contrasting those 3 sales, breaking down the reasons why each property sold for the price it sold, and comparing them to the property in question. I also had charts created from the multiple listing service (MLS) to illustrate how the neighborhood has performed over the last 3 years so my buyer can see not only today's data, but the longer term trends for the area.
Here are 2 of the charts that I sent him.
In any market, especially one as complex as the East Bay, it is very important to work with a Realtor who understands this local market, tours homes regularly, can compare and contrast the comps, and who gives you the insight needed so you can make the best decision for yourself. While I can legally sell a home anywhere in California, I only service areas that I am an expert in and suggest that all buyers work with an area expert. You will feel so much more confident buying a home with support, data, insight and knowledge, knowing that you've made the right choice.
If you, a friend or colleague is considering a purchase in the East Bay, reach out to me. I am here to help without pressure, and I will always tell my clients the information they may not want to hear, but need to!
Have a great second half of your summer!
