Buying a Home in 2023 will require research, guidance and knowledge.
Stefan and Sheryl are consistently researching property values, inventory levels and negotiating trends. We love helping our clients select property, whether for residential, investment or commercial purposes, we are happy to assist. Our value for clients when Buying Property includes determining the current property value, negotiating the best terms during purchase and evaluating a properties true cost and long term potential.
Determining Value of a Property
The values of property accelerated quickly in the past 2 years, subsequently, values were challenged by the unprecedented rise in interest rates. The future of property values in the short term will depend on the economic factors of 2023 and 2024, inventory trends and interest rates.
Many external economic factors influence the Real Estate market, including inflation, mortgage interest rates, Federal Reserve’s Mortgage Backed securities policy, the Bond market, and Unemployment rate. Important internal market factors include Housing Supply, Mortgage Application, Distressed Sales and the Rental Market. We monitor and assess this information daily to provide the best advice to our clients.
We will conduct a full market analysis of each property you are considering. Our Precision Pricing Strategy includes a detailed analysis of comparable homes focusing on Location, Finished Square Footage, Year Built and Style of the homes.
We then consider property amenities, such as number of bedrooms, baths, and garage stalls. Plus other amenities like luxury baths, walkout lower level, decks, vaults, porches, yards and landscaping. Next, we evaluate the property condition including the age of mechanical systems, age of the roof, windows and siding plus the condition of flooring, cabinetry, countertops and appliances.
Negotiating the Best Terms
Negotiating trends have already changed significantly in the past 6 months. During 2020 and 2021 Buyers were not able to utilize inspection and appraisal contingency clauses. The competition for homes was so intense that Sellers were able to select an offer with the least amount of contingencies. It was very definitely to the Seller’s advantage. Moving into 2023, Buyers are often able to negotiate inspection contingencies, repairs and appraisal contingencies into their transaction terms. These protective contingencies are valuable for uncovering and preventing costly repairs during the inspection process. The appraisal contingency allows Buyers to cancel a purchase or re-negotiate the terms if the property does not appraise for the agreed upon purchase price.
Assessing the True Cost of property requires a broader outlook at the property’s condition, current economic factors and future trends. True Cost considers the need to invest in the property and potential changes to surrounding areas property usage.
Evaluating the True Cost of Property
Many factors affect the true cost of a property and it’s long term potential. These factors include the age of the major mechanical and structural components such as heating, AC, plumbing, siding, windows, driveway, decks, foundation and roofing. It also includes the age and condition of cosmetic items like kitchen appliances, cabinetry, flooring, lighting, hardware and more. Additional details such as high utility costs, aging retaining walls, or aging large trees may also affect the true cost.
True Cost of Investment property also includes considerations such as area rental rates, competition from nearby rental properties, proximity to public transportation and the ability to add value by completing additional bedroom or bath space. We also consider necessary health and safety upgrades such as upgrading smoke detectors, installing security lighting and programmable locks.
Long term value of Investment Property can also be greatly impacted by changes in public policy, city rental restrictions, housing authority code changes and HOA rental policy changes.
Buy smart with The Petrashek Group
It’s crucial in 2023 to select the Right Real Estate Agents to help you Buy a Home in Apple Valley, Eagan, Burnsville, Lakeville, Farmington, Rosemount, Savage and Prior Lake! From Start to Finish, we can Help you Find your Dream Home!
Let us assist you in purchasing your dream home or investment property! We will evaluate each property, negotiate for the best terms, and guide you through the true cost analysis. Give us a call, text or email today to get started.
