Are You Looking At Home Value?
What’s interesting when we work with first-time home-buyers in the St. Louis region is that they often have different priorities than a second, third, or fourth-time home-buyer. The priorities are skewed and, in my opinion, incorrect. Once you have bought a house or lived in a couple of houses, you realize what’s truly important in a property, as opposed to kind of the knee-jerk reaction of what looks good and what you think you want.
Typically, kitchens and baths are what sells a property, but when you’re working with first-time home-buyers, the trend I’ve noticed is that it’s not only kitchens and baths but also overall finishing’s – the condition of the home, the hardwood floors, has it been repainted, and so on. The first-time home-buyer will typically overvalue the finishing’s and they’ll undervalue how important the nuts and bolts of the home are. The nuts and bolts, believe it or not, are the high ticket dollar items.
What Should Matter To Home Buyers?
When I talk about the nuts and bolts, I’m talking about is the HVAC system – the furnace and the air-conditioning, the roof, windows, the foundation and how good of shape it’s in. I’m also talking about some intangibles of the property like the location.
Is the property the nicest home that you’ve seen, by far, in your price point because you’re getting a good deal? Or, is it because it’s located right on Manchester on 141, like directly on 141? Highway 141 obviously is a very, very busy road here in St. Louis. The mistake I see time and again is people overlooking important unchangeable obstacles in the hopes of getting a nice looking house or a “good deal.” But the busy road is really what’s detracting from the value so you are not necessarily getting a good deal on the property.
Experienced buyers are more concerned with the location, and location is what drives everything in real estate. It’s the most important thing when buying a home.
I have many first-time home-buyers that want to live in Kirkwood and Webster, and when we get down to brass tacks and we look at it, the house they can get there in their budget is not something that they’re wanting to live in. They basically just can’t afford the land so then they have to move outside of their ideal location because they want a little bit nicer of a home for the money that they can get, which is fine, if that’s what they want.
Other Intangibles To Keep In Mind
When I look at a property, and I’ve bought over a hundred houses in my career over the last eight years (I own an investment company that is a we buy houses in St Louis company in addition to being a full time real estate agent), I look at location. I look at the house’s layout.
Can I remove walls? Is the layout awkward? And if it is awkward, that could be a good buying opportunity if I can make it not awkward. A lot of times, you can make money in real estate by taking something that’s awkward, rehab it, and make it not awkward.
Additionally, there’s other things that I look at, like the yard layout. The worst possible yard layout is a bowl shape.
Imagine you had a bowl of cereal and you put the property at the very bottom of the bowl. The only thing that can happen with the water when it rains now is that the water will always try to find the lowest point, and your property, the house on this layout at the bottom of the bowl, is at the lowest point. So what will happen is that you’ll typically find a lot of issues with water in the basement in that scenario.
The intangibles are things that you can’t change and should be an important part of what to look for, like the yard layout and the location. Is it on a busy road? Is the foundation in good shape? Did it have issues? Did they correct it properly? That’s really the most important part – making sure you get that good, solid home that you’ll then be able to turn around for resale, especially if want to sell your house fast.