If you’ve been thinking about purchasing a new home, now may be a good time to make a move. Even though we are currently in a seller’s market where home prices and interest rates are high, you may still find a property that represents a good value, ultimately becoming a great long-term investment.
Here are some tips that can help you determine if a property offers a good value:
1. Learn About Market Condition
Even in a seller’s market, there are a lot of good real estate deals out there. Don’t assume that all available properties in a seller’s market are overpriced. Take the time to learn about homes for sale in desired areas and compare prices based on location, square footage, upgrades, and property amenities.
2. Explore Possible Appreciation
The area you choose to live in can have a significant impact on home prices. You should investigate proposed and future projects planned in the area. New developments such as shopping malls, new schools, improved roads, bus and metro stops, and more can translate to bigger profits down the road.
3. Look at Unsold Properties
If the home you’re considering is priced in the same range as homes that did not sell, there’s a good possibility that the home you’re looking at is overpriced. If there are several similar homes on the market in the same area, listing prices should be lower, not higher, unless there is something that validates a higher price, such as:
4. Consider Income Opportunities
If you’re on a tight budget, consider possible income opportunities the home may provide. Some mortgage lenders will consider future income generated by the property when reviewing your loan application. Buyers using Fannie Mae loans are allowed to include future rental income in their lending guidelines if the property falls under one of these categories: (1) a principal residence with 2-4 units where the borrower occupies one of the units, (2) a 1-4 unit investment property.
While buying a home in a seller’s market presents challenges, it’s not impossible if you research and prepare to make an offer at just the right time.