The real estate system is not easy, whether you’re buying or selling a home. There are several factors to consider, including the area, the neighbourhood, surrounding facilities, the residents, and, most significantly, the market’s condition. If you’ve ever worked with real estate before, you’ll understand how important it is to know and understand the industry before taking the first step.
The real estate business is lucrative, but it can also be a tangled mess if you don’t watch your step; your dream home could turn into a nightmare in an instant. While virtual real estate viewings have provided investors, sellers, and homeowners with the comfort and ease of doing business that they have long coveted, they haven’t minimised the risks associated with the industry.
Efficient real estate owners believe that money is still made when a property is bought rather than sold. Real estate market research should always be performed before buying or selling a property to ensure that it is valued fairly. It’s important to distinguish between a real estate price study and an appraised value, which is determined by a professional appraiser. Subjective comparable market research informs the seller about the value of comparable houses in the region.
So, without further ado, let’s look at how a real estate review works.
1. Start with Historical Data
It is important to look back and understand where the company has been in order to properly comprehend where it is going. Online databases provide quick access to real estate market statistics such as recorded prices, how much a property is selling for, and the kind of area it is in.
2. Keep an Eye on Pricing Trends
Observing pricing trends is a quick and easy way to learn about the local real estate market. Compare recent market patterns against historical price movements using accurate and first-hand research. This will allow you to assess the market’s rise and expansion over the last few decades and make a reliable future prediction. Take note of the broad variety of prices for residential, commercial, and agricultural real estate in various areas and industries. This will assist you in comprehending sector rises and downs, as well as prospects.
3. Pay Attention to Key Market Indicators
Asking yourself, “How long do you want to stay in this house?” is a good place to start. Look for a location with decent colleges, many big employers, and modest population growth if you’re looking for a long-term home. Look for hot spots where buyers are increasing value if you’re looking for a short-term purchase. Long-term appreciation can be outpaced by short-term returns. Be mindful that these markets can be cyclical, so be prepared to sell as local prices peak.
4. Pick a Few Comps
Choose six properties in your neighbourhood that are comparable. Three properties should have sold in the last six months, and three should be on the market right now. Look for the following items during the screening process:
· Houses with an equal number of bedrooms and bathrooms.
· The square footage of the homes should be within 10%-20% of your intended purchase.
· Houses with a similar original construction date, architectural design, and the number of floors or stories.
· Houses with a similar lot size and shape.
· Houses with similar features like a free-standing garage, outdoor swimming pool or patio deck and scenic views.
· Choose properties in the same neighbourhood and preferably on the same block.
· Houses that are located in the same school zone.
Choosing these comparables will help you get a greater understanding of the real estate market.
5. Establish the Market Value
Based on your research, you should have a ballpark figure for what your property is worth. Consider the impact on the price after everything you saw while walking through the house. Then split the selling prices of comparable homes on your list by their square feet to get the price per square foot on each one. Multiply the comps’ estimated price per square foot by the square feet of the house you choose to sell or buy. Finally, determine where your home falls within the current price scale. This number represents the market value of your house.Trying to figure out how to perform a real estate market study on your own can be difficult; thus, you can still seek assistance from a realtor who can explain the method to you and guide you through it. You can also take virtual real estate site visits, which can help you get a sense of how the housing sector is doing.