Want Real Estate Value? Think Like an Investor!
As the current buyers market marches on, the one common theme that resonates with home buyers is a quest for value. Southern California’s real estate market is full of potential deals just waiting to be found. In order to find your deal, or your value, you need to think like an investor. The “investor approach” to buying your next home may result in instant equity and increased profitability over the long term.
So How Does an Investor Think?
Investors will generally seek to buy properties at a discount to market prices. Market prices are determined by looking at recent home sales of comparable properties (i.e., comps) in a given area or neighborhood. Foreclosures and Short Sales are key home sources for investors. While most home buyers do not have the resources – both financial and knowledge – to warrant buying foreclosures, short sales are readily available and where you should focus. An investor would look to pay approximately 80% of the market value for a short sale property – I believe a 10% discount is a realistic goal for most home buyers willing to look at several homes and make multiple purchase offers. Investors demand a slightly better deal as they are quite often buying with cash, closing very quickly, and with minimal contingencies.
With just over 40% of all Orange County real estate listings classified as short sales, finding potential homes that meet your buying criteria is not an issue. You can easily Search Distressed Properties in Orange County to get a full listing of short sale and bank owned/REO homes in your Orange County area. Once you have found your short sale dream home, your realtor can provide you with a Comparative Market Analysis (CMA) to assess the market value of the home based on recent sales of comparable homes in the area. Now you are prepared to make an investor like offer that represents real estate value!
Finally, while an investor seeks to eliminate emotional buying decisions, the majority of home buyers do in fact have strong emotional ties to their dream home. The typical home buyer “emotional factor” is always present, but when balanced with an investor’s mentality you will have the opportunity to find real estate value.