Real Estate Explained in Five Words
“Location, Quality, Price. Pick two.”
There you have it. Everything ever known about real estate condensed into five words.
Want that luxury estate on an oceanfront lot? Better break open your piggy bank.
Want that steal of a deal on a newly-built home? Hope you like to live in the midwest.
Want to be in that popular school district but don’t have much to spend? Your shed awaits.
It is human nature to want the best of everything. And it is real estate buyer nature to want the best of everything at a reasonable price. So it is perhaps our greatest challenge as Realtors to convey to our clients this five word principle.
Why? Because buyers are eternal optimists. And rightfully so. Who doesn’t want to find the perfect home/neighborhood/value for their money?
My job as a Realtor is to meet the goals agreed to between myself and my clients. But those goals aren’t set by the clients alone. I am responsible for educating my clients about the market and helping them craft a set of reasonable expectations. It would be a disservice to my clients for me to make them believe in a goal that cannot be accomplished within their given budget.
Let’s talk about the criteria of location, quality, and price…
Buyers tend to focus on location and a quality house first, with price factoring in AFTER they’ve fallen in love with something out of their budget. If I can give you any advice, it would be this: avoid looking above your price range at all costs! (Pun intended, almost)
Regardless of what platform you begin your real estate search on (Zillow, Trulia, Redfin, or my MLS portal) [Editor’s note: shameless plug], the first thing to do is limit your search to match your budget. Don’t become emotionally attached to an unobtainable property.
Location, location, location...many people have come to believe that this is the key to real estate, but that neglects reality. Location does not rule independently from price and quality. It is true, however, that location cannot be changed. No remodel ever improved the neighborhood, schools, views, or community that were associated with the house.
Consider location to be the catalyst of your house’s worth. Your house may be a humble bungalow or a sprawling estate, but location defines the intrinsic value of your home. Keep in mind that while you may personally prefer a particular location, it is also important to remember the impact that location has on RESALE value. Example: you don’t have kids, so you find a bargain in a bad school district, but that same district will impact your asking price when you eventually sell the house.
On to quality. This is the one area of the three that people seem to be most forgiving with. Is it simply a high tolerance for imperfections in a house? Does everyone feel handy after years of watching HGTV? Are buyers craving the opportunity to build sweat equity? Whatever the reason, buyers are most willing to concede a bit in this category.
There are two factors I can pinpoint: 1.) the desire to tailor every facet of the home to the client’s individual tastes, which requires making changes to the home anyway, and 2.) between home improvement and location, only one is modifiable. Home improvements not only add to the value of the home (typically) but they also make the home more enjoyable for years to come. Some buyers PREFER the chance to make their own changes to a house.
Keep these factors in mind when shopping for your next home. But let’s not carry on any further than necessary today. Five words should be enough.