What is the “Win” in Real Estate right now in this Market?

This is the number one question we answer each week. As you know, real estate cycles. You may find yourself employing a strategy that was just right three years ago, or even last year, but is not appropriate for the next season. The key is to remain flexible and adaptable. It is also essential that you educate yourself and not rely on what worked for you yesterday. Basically, you must do your research.

This market is moving so fast that you might find yourself wasting time writing offers that would have been respectable last year but will not even be considered by a seller now. This can create unrealistic expectations and result in you not having an investment property that could be making you money. If it is a residential property, you may lose the house that was “perfect” and have to settle for a compromise at the same or higher price once the dust settles. You need comparable properties from less than 3 months ago in this market.

The same is true if you are a seller. You can very well be selling below the market if you rely on comparable properties sold 6 to 12 months ago. You should check what is currently pending. Appraisers will use everything that sold in the last 12 months to value your property, but that might be inaccurate. It is good to give appraisers the comps that were used to set your listing price and negotiate your offer.

So what is a win if you are a buyer? New construction is generally below appraised value. Look at what you are getting ready to build and see what it would sell for today if it was completed. The carry costs of the construction loan are generally minimal compared to the equity you will realize by the time it is constructed. New construction allows you to get the latest in finishes, the latest designs, new appliances. Your maintenance on new construction will also be less than older homes and cabins for years to come.

What is a win if you are a seller? If you have a great deal of equity, now is a superb time to sell. This can allow you to sidestep maintenance issues that might be knocking on your door. If you have some negative features that in a normal market can be difficult to deal with, you will find this market very forgiving. Items like steep driveways, not much privacy, poorly maintained houses around you, an outdated floor plan, old appliances, lots of wallpaper, or kitchens and baths that are expensive to remodel and could use a fresh face – All these challenges can be easily overcome in our aggressive low-inventory market.

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