The three determining factors considered as homebuyers evaluate a real estate purchase are location, price and condition.
Now while price and condition are totally within the control of a property seller, the location simply "is what it is." For this reason, both a homebuyer and prospective seller should consider the following data, recently released by the National Association of Realtors.
The 2011 survey of homebuyers and sellers revealed that the suburbs are where the majority (51 percent) of all homes purchased were located. This group was followed by 18% of purchases being made in urban areas, 18 percent in a small town and 11 percent in a rural area. If you are a home seller, this information gives you a guide to the number of potential buyers for your property, relative to the total pool of purchasers. Depending on which niche your property fits into, you may have a relatively small pool of potential buyers.
When looking at the factors which influenced neighborhood choice, there were a number of contributing factors including: quality of the neighborhood at 67 percent, convenience to jobs/work at 49 percent, overall affordability at 45 percent and convenience to family and friends at 39 percent. From this you could discern that a well maintained, convenient subdivision that was well priced for the market would be a desirable place to be a home seller!
This data can be very useful for both homebuyers and sellers. If you are a seller, you want to make certain that the comparables you are using to price your home for sale are close matches to your property. For example, if your home is 30 years old and in a neighborhood with no amenities, then a two-year-old home in a newer development with community pool and tennis court would not be a good comparable.
If you are a prospective homebuyer, then you
would want to consider this data in a different manner. While you want to develop your "must haves" in a new home, you may also want to consider future resell appeal if you think you may be moving in a fairly short period of time.
Bottom line; consult an experienced Realtor to help you price your home correctly for its location if you are a seller. If you are considering buying a home, get expert advice from a Realtor on fair market value, so you do not overpay for your next home.
Mark Hite is president of the Greater Chattanooga Association of Realtors