Financial Planning, Retirement Issues

The real estate market has changed

real estate marketThe real estate market has changed in the last few years partly due to the recession and partly due to the fact that people in general have less money to spend after paying for many of the other things we need to survive in life. Everything has gone up in price, while many people have lost jobs or are in jobs that do not pay well enough for them to be able to afford a home of their own.

Remember not so long ago, when you could make your fortune in real estate. It was nothing then to buy a home, wait a short while, and then sell it at a tidy profit. And then they would do it again. Inflation was raising the price of homes dramatically. Then came the huge recession and the price of homes dropped like a stone with many home owners losing their homes because they could not afford the mortgage any longer. If you had the money at this time, a lot of money can be made in real estate by buying when prices were low. They have since recovered somewhat.

Real Estate Market Seller Mistakes

Well, as you probably know, times have changed. Since markets are constantly fluctuating, real estate markets are unpredictable because of changing prices and interest rates. Therefore, it is now more critical than ever to learn what you need to know to avoid costly seller mistakes in order to sell your home fast and for the most amount of money.

Buyers are far more discriminating, and a large percentage of homes listed for sale don’t sell the first time they are listed for sale. Buyers want everything to be upgraded or they want the home to be priced so low that they can afford to do the upgrades themselves. Then again may buyers do not want to be even bothered with the mess and difficulty of upgrading a home.

For example, if you have an older home with wood framed windows, these windows require painting every few years and they may need to be replaced if the wood begins to deteriorate. Windows can be expensive to replace with some homes costing as much as $15,000 or even more to replace all of the windows. Many buyers want to see that this upgrade has already been completed so that they do not have to deal with it and come up with the money. At the same time sellers will sell their home faster and for a little more money than they would with a home with wooden windows, but they do not reap the entire amount when they sell.

The same situation applies to kitchen and bathroom upgrades. Someone who has taken excellent care of their home may feel that their kitchen and bathrooms are in excellent condition. But the problem is that in a 25 year old home they are out dated and not attractive to someone who is looking for a beautiful bathroom with marble counters and tiled showers. Kitchens need to have granite counter tops, upgraded or modern cupboards and new appliances to be attractive to buyers, particularly the younger buyers.

Real Estate Market – Don’t spend Too Much

Some homeowners will spend up words of $50,000 on these upgrades only to find that the price of their home does not increase accordingly. It will definitely sell faster and they will get more for their home than the guy next door who has not completed nay up grades, but they will not get the full amount that they have put into their house.

For most people this is ok, since they plan to stay in their home for several years and enjoy the work they have done on their homes. When they do decide to sell they at least have enjoyed what they have and at the same time will obtain a higher price for their home than they might have other wise.

Some consumers are willing to purchase homes that need work, however they expect a corresponding decrease in the cost of the home they are buying. With the money saved they plan to do the upgrades to meet their personal taste and then enjoy them. These consumers tend to know the cost of upgrades, are good at estimating the costs and are good at designing their own rooms the way they want them to look. They also are willing to put up with the dust and the construction activity while it is being completed, which many people are not.

The real estate market has certainly changed and if you are planning to sell, you must take all of these factors into account when you prepare to sell or buy a home.

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