Real Estate – Purchase Valuation
One of the hardest things as a buyer is determining what a property is worth. This can be especially difficult if you are emotionally invested in a home that you saw. The process of valuation should rest on the shoulders of your agent. You should trust the information is accurate and do not hesitate to ask questions on how the suggested value (or offer price) was determined.
When evaluating a property for a buyer the agent should factor in comparable sales, current market vs these comparable sales, quality of building/structure, quality of interior/finishes, forecasted improvements needed and when, condition/age of mechanicals, general maintenance, projected growth for given location, natural light exposure, ceiling height, layout, lot design and quality, exterior space or ability to improve such, general amenities such as sqft, beds/baths; etc. In order for a buyer to have a chance at securing a property (without over-paying) these contributing factors of value must be analyzed. If you do not have representation to effectively determine value, the chances of you making a bad investment and/or purchasing a property that has compounding costs are exponentially higher. It is essential that proper and detailed evaluation be completed prior to offer submission.
Additionally, I also caution buyers to not put much emphasis on estimates provided by Zillow, Redfin, or the like. These are often inaccurate and highly influenced by the asking price. I have seen many of these “estimates” on my own listings adjust to at/around asking price once a given property hits the market. So, by the time a buyer sees the “estimate” it may already have been influenced by the asking price. These website algorithms are impressive technology… but they are far from perfect and do not factor in many of the mentioned variables that can greatly impact value. This is especially true in areas such as Boston where the age, the style, and the location within a small neighborhood can vary wildly.
When making what is most often the biggest investment of your life, ensure you have the proper representation to eliminate costly mistakes. This will significantly increase the likelihood you have a strong return on investment when the time comes to sell.
Remember: a buyer agent only gets paid when you buy… so do your best to make sure your motives are aligned!