We’re going to get into a series of discussions here on seven reasons why a property sells; today we’re going to talk about location. Thank you so much for tuning into the Real Estate Today podcast.
I’m Bob Nelson, real estate investment broker with Pacwest Real Estate Investments. And I’m Marcia Edwards, residential broker with Windermere Real Estate.
Marcia E.: We’ve been talking about the shifting market. There’s a change and real estate is cyclical so we should expect that there will be ebb and flow. We’ve had a robust seller’s market, which has not always been fun depending on where you sit in the marketplace.
But let’s talk today about the influences of a sale and see if we can’t help you be successful despite the spot in the market that we’re in.
Bob N.: Well, and it’s not exactly a bad market. But it’s a market that’s induced, in my opinion, by interest rate changes. And as that happens, you earn a certain amount of money. That qualifies you in the eyes of the lender to be able to borrow a certain number of dollars.
Now that income that you’ve been earning is still the same. However, if the interest rate goes up, the payment goes up and you’re qualified for a lesser amount of borrowing capacity.
Marcia E.: So, as we look at the seven influences of the sale, which one is terms, which is what Bob’s alluded to …
Bob N.: Right.
Marcia E.: … is that financing is an influence. Where the demand comes is when the terms are very appealing to a lot of buyers and accessible.
The seven reasons are: location, timing, pricing and positioning, the terms in financing, the marketing exposure, the condition of the property and the expertise in the transaction.
So let’s talk about location and how that influences a sale.
Bob N.: Certainly if everybody thinks for just a moment. Real estate is absolutely fixed in location. If you purchase a property late in the evening simply because you like what you’ve seen on the inside it closes that next morning. You show up and it’s next to the garbage dump, you cannot dig up that property and move it some place else. You own it from the center of the earth through the property surface boundaries upward to a height necessary for the beneficial use and enjoyment of that property. It is absolutely fixed in location.
Marcia E.: So in looking at that, that location is something as a buyer you’re going to stay very tuned in on even if you can tolerate living next to the dump … because you can’t smell or whatever it is … the next person may not. So consider that in your pricing. When you make an offer you’ll want to have a little bit of a discount given to you so you can provide that at the time of sale without losing your margin.
Bob N.: Exactly. There’s not much you can do about that. If you’ve made a choice where your location is deemed to be not particularly appealing for the use that’s made of the property, you’re stuck with it.
Marcia E.: That’s right. A breeze will not be your rescuer.
Bob N.: No.
Marcia E.: I’m Marcia Edwards, Windermere Real Estate.
Bob N.: And I’m Bob Nelson, real estate investment broker with Pacwest Real Estate Investments.
Join Bob Nelson and Marcia Edwards Eugene, Oregon, real estate experts daily at 5:30 on KPNW for the “Real Estate Today ” radio show.