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Don’t Forget The 3 Main Home Buying Aspects!

By Megan Gates

Elliman Brooklyn Real Estate

It is important to make sure that you are doing as much research as possible when you are trying to buy a home. To be an educated buyer means that you will be able to get the best home possible and you will be able to make the process work a lot easier for you.

Dottie Herman is the CEO and the President of Prudential Douglas Elliman and she is often looked to for some of the best real estate advice. During a recent broadcast of “The Art of Negotiations”, on “Eye on Real Estate with Dottie Herman”, she discussed the three most important aspects to purchasing a home. The three main components that make up the “worth” of a home are that of the value, the cost, and then the price. Even though these three things might sound extremely similar, they are not.

Herman helps buyers by answering questions in order to help them to decide whether a home is worth what is being asked. She helps them understand that the list price may not be worth it to one person, but at the same time it may be worth it to someone else.

Herman also works hard to make sure that her listeners understand the importance of hiring a real estate broker. A broker will have a vast knowledge of the market and once he or she understands your needs, will be able to send you in the right direction. It is the job of the broker to make sure that you are investing your money wisely.

When you have finally found a broker that you feel comfortable with, you are going to want to make a list of the property attributes that are important to you. You will also need to go over your finalized budget. Once you are looking at the properties out there, remember to think about the value, the cost, and the price.

Value

Herman explains, “It’s an opinion of what you think the home is worth, based on how you are going to use it.”

Value is something that is going to be calculated very differently from one person to the next. It is all going to come down to the lifestyle of the person looking at the home. If the home meets their specific needs and desires, then the value of the home will increase.

Cost

Herman is also quick to point out that sellers are making the dreadful mistake of assuming that the cost of the house is the combination of what they paid for it plus the cost of all of the improvements they have made over the years. She continues to explain why that is faulty, “Cost is [just] a measure of the past.”

When improvements are made in a home, the “value” can be increased, but the actual “cost” is not. Remember, each and every potential buyer will see your home differently so they may measure that value differently as well. Some may think your home has incredible value for the improvements while others may not be overly impressed. Herman reminds her listeners, “Cost and value are not what the price of the home should be or shouldn’t be.”

Price

“Price is what the home should be worth today. But sometimes people don’t price it right, so what you really want to look at is fair market value”, Herman explains regarding the determination of whether or not a property is priced correctly.

As you can see, there are so many things to consider when it comes to purchasing a home. This is why it is so important to make sure that you are doing as much research as possible and taking advice from those such as Dottie Herman.

By Megan Gates

Elliman Brooklyn Real Estate