As A Buyer, How Can I Use the Principle of Conformity to My Advantage?

Ever go into a neighborhood and notice one or two homes that stuck out like sore thumbs?

One might be whole a lot fancier than the houses surrounding it while the other might be a "dump" in comparison to neighboring properties. This scenario illustrates the real estate principle of "conformity." The primary idea behind this principle is that a house is more likely to appreciate in value if age, size, condition and style are similar to, or conform to, other houses in the neighborhood.

But this principle also extends to buyers. By that I mean that if you make your property a lot "fancier" than others in your neighborhood, you end up limiting potential buyers.

Of course, the opposite is also true. Don't take care of your property, and you'll definitely have fewer buyers looking at it.

Conformity is closely related to two other principles - progression and regression.

In plain English, regression means that high-valued properties often tend to suffer when located close to lower-valued homes.

Progression, on the other, means that lower-valued homes will often see increased value when found amongst higher-valued properties.

This formal principle leads the informal maxim, "Buy the cheapest property on the block!” The higher value of the homes around it will, in turn, make it more valuable.

As A Buyer, How Can I Use the Principle of Conformity to My Advantage?

I've already mentioned one method - buy the least expensive house in the neighborhood! Once you do that, improve it, and you'll get most bang for the buck on your improvements.

Of course, look at such a property carefully first (often called "due diligence"). Spend the money on a real estate appraiser so you get an objective evaluation.

Of course, avoid any homes that need major fixes such as roofs, foundations, siding, plumbing, electrical work etc. The last thing you need is a "money pit" into which you keep throwing dollars and get little or nothing in return.

Be sure to seek out sound properties, ones needing only minor fixes such as painting, cleaning, landscaping, carpets, new appliances, etc.

If you're a buyer interested in real estate investment, purchase a home in a neighborhood that's just beginning a revitalization cycle. That way you can be sure values will appreciate. 

You can also look for under-improved properties such as single family homes which can be converted to residential income or commercial use, especially if such properties lie in the "path of progress;" that is, areas experiencing good growth.

As A Seller, How Can I Use the Principle of Conformity to My Advantage?

As a seller, simply make sure that you maintain your home and lot in line with surrounding properties.

Of course, if you've already done that, then invest in low-cost improvements such as new paint inside and out, landscaping, a professional cleaning job, etc.

If they're in bad shape, you might also want to add new carpets and/or new appliances. 

All these actions will improve the value of the home in the eyes of buyers. 

If you're an experienced do-it-yourselfer, you may want to tackle some improvement projects since they can cost less than half of what professional contractors charge.

However, notice that I emphasized experienced! An amateurish job on, say, cabinets or roofs can actually reduce the value of your home. So, unless you're really, really good at it, leave major home remodeling projects to the professionals.

Want to learn more about buying a home at best value or selling it at maximum value? Then, call me at 402.690.1573 right now or email me at teresa@teamelliott.net!

Why Use the Services of a Real Estate Agent?

This question is often asked, especially by homeowners who consider selling their homes by themselves.

The fundamental first answer to this question is that an experienced realtor is an expert at what he or she does. Through hard work and education, they’ve acquired a set of skills that make the process of home buying and selling a lot easier than it would be by doing it yourself.

So, what are the skills in the set I’m talking about?

Well, for one thing, we have the skill of being the go-between. We’re the people who handle people and calls and separate the “wheat” (real buyers) from the “chaff” (non-buyers) without you ever having to deal with such situations. In Internet terms, we make sure you’re not “spammed” with worthless offers and target real deals for you.We’re also the ones who save you a lot of time by making sure you’re looking at appropriate properties and neighborhoods right from the get-go.

And, speaking of neighborhoods, an experienced realtor will know them inside-out or will know how to find the latest information on them. That means he or she can get you into neighborhoods where the crime rate is low or non-existent, find you ones with great school systems, rising property values, etc.

By the same token, an experienced agent will steer you away from neighborhoods where the trends are downward; that is, rising crime, falling property values, and so forth.

And what about the prices of homes? Well, some people believe that we select them for our clients. Not true! We have no way of setting prices. They’re set by the market! However, we can guide you toward properties that fit your individual needs and are comfortably within your price range. Frankly, it’s not in our best interests to put you into a home beyond your means or that’s not right for you. When that happens, we lose clients and money!

So, we’ll do our best to work within your price range and, based on current information (market supply, demand, etc.), we’ll come up with the best negotiation strategy possible. Current information can include cost-per-square-foot of homes, ratios of list-to-sold prices, knowledge of the buyer/seller, etc. All this information is gathered by the agent and used to formulate solid offers.

Another important skill experienced Realtors possess is objectivity. We have the ability to stay out of the emotional process that often occurs with the buying and selling of a home. Instead, we present your case in the best light possible, all the while holding your information confidential from any competing interests.

One realtor skill that’s often not apparent is our ability to network with other service providers (housing inspectors, title companies, etc.) Professionally, we can’t recommend one specific vendor over another. However, we do keep lists of vendors with excellent reputations as well provide references for the vendors. This service allows you to choose the best provides for your particular situation.

Now, here’s one realtor skill that everyone truly appreciates – the ability to handle tons of paperwork! Today, purchase agreements can run 10+ pages, and that doesn’t even include all the state and federal disclosure statements that are required in the current market! Heck, a real estate file can end up being 2-3 inches thick with paperwork these days!

And it’s not only the heavy paperwork handled by realtors; it’s also the attention to detail within that paperwork. It’s their job (or a lawyer’s, depending on the state) to make sure all the information is correct because if it isn’t, it can end up costing the client hundreds of dollars.

So, as you can see, there are many reasons why it’s wise to use an experienced Realtor for the purchase or sale of a home! To find out about the services I haven’t mentioned in this article, contact me today at teresa@teamelliott.net.

Why Interest Rates lncrease Very Soon

Buy That Home Now – Before Mortgage Interest Rates Go Up!

Here's a very important article I'd like to pass on for you.

Jeremy Siegel, Professor of Finance at the Wharton School of Business, and one of the foremost experts on the economy, predicts that “historically rates will move toward normal” in 2010.

Translation: If you want to borrow money to buy a new or existing home later this year, you’re going to pay more! Professor Siegel says that, overall, 2010 will actually be a good year economically – unless you’re a borrower!

The reason is that he believes the Federal Reserve will be forced to raise interest rates because of the improved economy and increased profitability. This action will be taken to keep inflation at an acceptable level.

So, there you have it! By buying now, you can save yourself a heckuva lot of money on a mortgage.

Plus, don’t forget – you can save even more through the government’s Home Buyer Credit Program – up to $8,000 if you’re a first-time home buyer and up go $6,500 if you’re a long-time homeowner buying a new principal home!

P.S. The Homebuyer Credit Program is scheduled to end April 30, so ACT NOW!