How To Predict Real Estate Prices

The price of your real estate property depends on its value. The value of the property can be both subjective and objective at the same time. The subjectivity lies on the likes and dislikes of the buyer which can be based on his emotional requirements. The objectivity of attaching a price tag to your property depends on the market condition, comparison with other houses in your neighborhood, trends and forecast, mortgage interest, and house condition.  

Value can also be related in a moment in time. For instance, the buyer can gauge the value based on how much money he currently has, or what time of the year they go out and look at your house.  Here are some pointers that are true in determining the price: 

  • Prices fluctuate; it cannot be the same forever. They go up or down, depending on many factors;
  • Value is a dependent concept; it depends on what person wants to buy;
  • Agents and sellers can set the price but it’s the buyer that determines the value. You can change the price every day but in the end, you are not the person who can tell if the price is worth the value of the house. The buyer has the last say if the price is right.

So, how can you predict real estate prices?  The price is determined by how much the buyer is willing to pay in today’s market. He will set the price after comparing it to other houses in the same neighborhood. But the truth is he will not compare it to other houses if he doesn’t like it in the first place. The price of the comps that are sold the day the buyer shops is the most critical factor in determining what price is he willing to buy your property. 

It’s important that you know you are not the only one selling homes for sale in rancho santa fe. The number of buyers is limited and you want to give the best deal if your home is chosen.  Selling a house is like a race, you need to find the right buyer as soon as you can before someone else takes them. Once you find the right buyer who settled for the price that you want, that’s the time you can say that you win the race.   

Another way to predict the price is to know what’s going on in the market. For instance, if your competition drops their prices $10,000, then your house is marked overpriced. Pay attention to value movements in your marketplace since it also determines how much your house will cost. 

Do You Actually Need A Real Estate Agent?

For every advantage we hold, there’s always a disadvantage that goes with it. We cannot always get the best of both worlds. Something must be sacrificed or given up anywhere in between. In Real Estate transactions, you can always buy or sell properties without hiring the services of an agent. You’ll just have to be familiar with all the processes involved to make sure that everything you do is legal. You also understand all the risks involved if in case you do it yourself. So, do you actually need a Real Estate Agent? 

Yes if… 

You need the guidance of an expert 

If you think that you’ll need the guidance of an experienced Real Estate Agent, then go ahead. The fees you will have to pay if you’re a seller can go a long way as they can help you get the best deal for your property. You can also get to sell your property much faster as they may happen to know someone looking to buy a property exactly like yours. If you’re not sure about what you’re doing, hire an Agent.   

You want to have access to useful resources 

Hiring the services of a Real Estate Agent is tapping and leleveraging their professional network and resources they have access to. For you, this is what matters most for you’ll know that you can sell your house at a better price or buy a house for the best deal. Whatever your case, hiring an Agent for this purpose can serve you well. 

No, if… 

You need the money  

If you’re selling your house for financial reasons, not paying for the agents’ commissions can certainly go a long way in helping you survive one of the toughest moments of your life. One other valid reason for not hiring an agent can be that you are confident enough that you can do it without their help and get the most money since you’re not paying for agents’ commissions. 

You’re not sure he has your best interests 

If you don’t trust Real Estate Agents, you may be better off doing most of the transactions yourself and hiring a Real Estate Lawyer instead. The horror stories you’ve heard from friends, relatives or co-workers has traumatized you that you promised you won’t ever seek their help no matter what.  

The choice is always up to you. Weigh all your options and study them carefully one by one. After all, it is your responsibility to decide what you think is best for you. No one else can do it for you. One of the best things we can do about our fate is to trust our instincts and live or die by its results. For what is Life without risks, right? 

Investing In Real Estate

Many investors are turned off by real estate because they do not have the time or inclination to become landlords and property managers, both of which are in fact, a career in themselves. If the investor is a rehabber or wholesaler, real estate becomes more of a business rather than an investment. Many successful property “investors” are actually real estate “operators” in the real property business. Fortunately, there are other ways for passive investors to enjoy many of the secure and inflation proof benefits of real estate investing without the hassle. Active participation in property investing has many advantages. Middlemen fees, charged by syndicators, brokers, property managers and asset managers can be eliminated, possibly resulting in a higher rate of return. Further, you as the investor make all decisions; for better or worse the bottom line responsibility is yours. Also, the active, direct investor can make the decision to sell whenever he wants out (assuming that a market exists for his property at a price sufficient to pay off all liens and encumbrances).

Passive investment in real estate is the flip side of the coin, offering many advantages of its own. Property or mortgage assets are selected by professional real estate investment managers, who spent full time investing, analyzing and managing real property. Often, these professionals can negotiate lower prices than you would be able to on your own. Additionally, when a number of individual investor’s money is pooled, the passive investor is able to own a share of property much larger, safer, more profitable, and of a better investment class than the active investor operating with much less capital.

Most real estate is purchased with a mortgage note for a large part of the purchase price. While the use of leverage has many advantages, the individual investor would most likely have to personally guarantee the note, putting his other assets at risk. As a passive investor, the limited partner or owner of shares in a Real Estate Investment Trust would have no liability exposure over the amount of original investment. The direct, active investor would likely be unable to diversify his portfolio of properties. With ownership only 2, 3 or 4 properties the investor’s capital can be easily damaged or wiped out by an isolated problem at only one of his properties. The passive investor would likely own a small share of a large diversified portfolio of properties, thereby lowering risk significantly through diversification. With portfolios of 20, 30 or more properties, the problems of any one or two will not significantly hurt the performance of the portfolio as a whole. Types of Passive Real Estate Investments:

REITs-Real Estate Investment Trusts are companies that own, manage and operate income producing real estate. They are organized so that the income produced is taxed only once, at the investor level. By law, REITs must pay at least 90% of their net income as dividends to their shareholders. Hence REITs are high yield vehicles that also offer a chance for capital appreciation. There are currently about 180 publicly traded REITs whose shares are listed on the NYSE, ASE or NASDAQ. REITS specialize by property type (apartments, office buildings, malls, warehouses, hotels, etc.) and by region. Investors can expect dividend yields in the 5-9 % range, ownership in high quality real property, professional management, and a decent chance for long term capital appreciation.