Is Your House in the Real Estate Goldilocks Zone?

Is Your House in the Real Estate Goldilocks Zone?
Posted By Jeffrey Hogue @ Jun 19th 2020 10:30am In: Real Estate

The Goldilocks Zone is a reference used by astronomers and scientists to describe a habitable zone around a star where conditions are right for liquid water and possibly life to exist on a planet. In this article, I will endeavor to explain why some houses sell quickly for over asking price, and some sit just waiting for a buyer. Maybe it's all about the right conditions - Welcome to the Real Estate Goldilocks Zone.
 

Okay - I probably watch too many shows about the universe, and there is no question I am always thinking about matters relating to real estate. Recently I was introduced to a documentary about the Goldilocks Zone. What amazed me is that a planet can be a hair too close or far away from a star, and it is either scorching hot or bitter cold. In either case, it is not suitable for life comparable to Earth. But if that planet is situated perfectly with the right conditions, bingo!

 

Location is Always a Key factor

As planets and real estate go, location is a crucial factor. If your home is in a desirable school district, close to amenities, and employment opportunities, you're off to a great start. If it is not as close to amenities, more land and privacy are significant compensating factors. If your home has all the above, conditions are very favorable.

 

Price is the Ultimate Compensating Factor

Another critical condition used to get the home in the zone is the asking price. Price is the ultimate compensating factor. Pricing a home is a time earned skill that goes far beyond fundamental factors like house size, bedrooms, baths, etc. It is essential to understand the economic environment that will impact the property (jobs, mortgage programs, lending limits, etc.).

 

For example, FHA loans allow home buyers to purchase a home with minimal funds and flexible guidelines. In Berks County, the FHA lending limit for single-family homes is $331,760, while the limit in Montgomery and Chester is $408,250. FHA loans fund approximately 40% of all home purchases in these areas, so understanding the lending limits offer guidance to help you stay in the zone.

 

Amenities and Condition are Icing on the Cake

A well-conditioned, clean home is hard to resist. Top that off with some tasteful decorating, and you will have home buyers calling to set up showings day and night.

 

Timing Helps

Often I am asked, "When is the best time to sell my home?" I have been selling real estate since 1993, and I have never seen a more robust seller's market. Low-interest rates and low inventory have driven local median home prices up over 10 percent year over year. In the northeast, the strongest seasonal real estate market is between April and August, and we all know what happened to April, so there is plenty of pent up demand.

 

Bringing it All Together

Home sellers have the advantage in this climate of low available home inventory. Often the homes that sit on the market waiting for that one buyer to come along have misjudged their key compensating factor, price.

 

I believe that in the present housing environment, it would be more advantageous to underprice a property than overprice it. Within reason, a slightly underpriced home will immensely appeal to the mass of buyers shopping for available homes online every day. That appeal can lead to a bidding war with multiple offers over asking price with favorable terms and conditions in a timely fashion. Overpricing a home by not correctly evaluating the compensating factors may lead to extended days on the market, price drops, and, eventually, unfavorable offers.

 

I hope you enjoyed my spin on selling a home and what it takes to be in the Goldilocks Zone. A well-seasoned experienced real estate agent can make sure you are aware of all the conditions that lead to a successful home sale.

 

In outer space, it takes billions of years for the right deal to come along. A great Realtor can make it happen in the blink of an eye.

 

Knowledge is Power!

Jeffrey C. Hogue


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