As compared to other asset categories, real estate is an illiquid, long term asset. It will generally take a longer period of time to convert the value of real estate into cash than, for example, gold, silver, stocks, bonds, or fine art. Buying a home when you first relocate to Austin, or when you might have to change jobs can be risky if you don’t hedge your bets. What should you look for in a home when it’s possible that you may have to sell soon? Here are 6 unbreakable rules of buying a home you might need to sell soon.
Location, Location, Location
Yes, it sounds trite, but it is true. Location is the one thing that you absolutely cannot change about a property and it has a huge impact on how much you will enjoy living in the property. Our recommendation? Buy in the very best location you can comfortably and confidently afford. Homes located in the best locations are easier to sell. Homes in the best locations sell faster and for more money than homes in comparatively inferior locations. Homes served by superior schools – especially Exemplary elementary and middle schools – are in greatest demand because of the scarcity of classroom space in truly outstanding schools. Those people who recognize the importance of a quality education will pay a premium to own a home in a neighborhood served by an Exemplary school. Want more info about location? Check out our Top 9 Locational Flaws that Affect Home Values post.
Watch Your Cash Flow
Choose a zero-point mortgage loan. There seems little reason to pay “points” (prepaid interest) on a loan when you will be paying the loan off soon. While points may be deductible for tax purposes, once you pay the money is gone forever.
Minimize Upfront, Out of Pocket Costs
Find a home that requires little fixing up or improvement. The costs for substantial improvements is rarely recoverable in the first few years of ownership. If you must personalize the home for your own satisfaction, keep it modest and simple. The next buyer will probably not appreciate your efforts or taste.
Avoid New Construction
When you buy a newly constructed home from a builder or developer, you are paying top dollar for the property. The upgrades, change orders and personal added enhancements generally do not translate to increased value. So, if you are forced to sell sooner than the market can catch up, you may end up losing money. And, when it’s time to sell, you will be competing for the same buyers as the builder/developer who can offer greater incentives than you can.
Don’t Buy the Best (or Worst) Home in the Neighborhood
Ideally, buying a home slightly above the median price in the neighborhood seems to produce the best results. Owning the best home on the block usually means the less expensive homes detract from the value of the best one. And, the worst home is the least desirable because of it’s incurable defects (things you can’t change) and issues involving functional obsolescence (i.e. reverse floor plans).
Plan Your Exit Strategy Before You Buy
Before you buy, consider carefully how long you want to live in the property and examine what circumstances could force you to sell before you are ready. A prudent plan can take some of the uncertainty out of the process and build in some safeguards. While you can’t control the real estate market, you can with forethought set up more favorable circumstances to advance your life goals.
Stay On Top of the Real Estate Market in Your Neighborhood
When you might need to sell soon, you’ll want to stay on top of the market so you’ll be more prepared to make decisions. Lucky for you, we have a tool to help you do just that! Our Austin Home Value Tool will send you detailed market reports with homes for sale and sold prices of homes that closed. This tool is FREE to our readers and just requires your address and email to generate, no need to speak to a Realtor if you don’t want to!
Thinking of Buying a Home You Might Need to Sell Soon?
As experienced buyer’s agents with a combined 55+ years of experience in real estate, we can help you evaluate homes to ensure you are doing everything you can to protect your investment. This way, if you have to sell soon, you have the highest chances of recovering as much money as you possibly can. Check out our Austin Home Buyer page for more about our program and learn how we’re different than most Realtors in Austin. Then, call us at (5120 827-8323 or email us at info@11OaksRealty.com to schedule a no obligation consultation.