Advice to buyers for the 2007 market

As we move forward in the 2007 real estate market it is helpful to see how the 2006 year end played out. If you click on the link you will be able to read my full report.

http://debrasinick.com/docs/Stats%20for%20Dec%202006.pdf

After looking at this information, watching how this year has begun (see my post for January 2007 stats), and the increase in home values, I want to focus on how you can maximize your home purchase. For those just starting out, it has been more difficult with each passing year to purchase real estate on the Eastside. Here is some advice as to how to do it and make the most money you can as a home owner.

My advice to the first time home buyer: get into the real estate market as soon as you can. Buy a condominium. Condominiums have appreciated better than single family homes with about a 24% increase in value during 2006. (see my State of the Market post)

Think about the emotional and financial benefits of owning your own place. You can make it your own, you can write off the interest on your mortgage and real estate taxes, and you can build equity. Rarely does anyone start out buying the home of their dreams. Most people start out buying a wonderful place to live in, but hopefully a place that will be a good investment.

Remember, you may “get a good deal” when you buy, but you also need to look for a great property to sell later. Maybe the home you purchase at a great discount today is not the best investment for the future.

How can you make the best buying decision so you will have a great home to sell?The key to that good investment is to remember today you are a buyer, tomorrow you will be a seller.

So here are the key questions to examine when making the best investment for future return:

Know thy neighborhood!

Location, location, location is still the key.Know the neighborhood pros and cons.

How far are you from employment centers, public transportation, highways?

What is the reputation of the school system and specific schools? Would the value of your home or condo be stronger if you purchased a similar home in a different school district?

What are the area amenities? Are you close to shopping, parks, etc?

Historically, what is the appreciation in the area?What is the current absorption rate of the homes?

Are there positive/negative present issues or future issues that impact the neighborhood and will affect your future resale value?

Know thy home or condo!

Check out the builder. Know the builder’s reputation.Has the builder been involved in any lawsuits?What is the builder's reputation for quality? (You should try to find this out even with a home that is not new)

If you are buying a condo, is it brand new construction or an apartment conversion?

What do the home owner’s dues actually cover?

Is insurance covered in the dues and what do you then need for insurance?

Do you know what a resale certificate is?

Is the floor plan a good one for your needs and for future resale?

Are there any important structural issues that seem apparent?

Should you reconsider purchasing this home or bring it to the attention of a building inspector if you decide to buy it?

Is the home in need of updates? What would be the best updates to make in the future?

Is the home located on a good street?

Is the yard a good one?

Are there noise issues?

Is there an active home owner’s association? Are there rules which will prohibit you from doing what you might want to do?

Is the home priced right for the current market?
What is the direct competition?
How many homes are selling this month?
What is the recent sales history?

These questions and more should be answered when buying a home or condo. Remember, a home buyer will a home seller be in the future. If you can answer these questions and believe you are making a good investment, then go for it! Happy hunting!

Feel free to comment if you have any further questions you think are important to ask before you make that home purchase.