The Real Deal
Spending extra on location can pay off
Most prospective homebuyers have heard the old adage that the three most important factors to consider when buying real estate are, "location, location, location." In reality, although location is important, there is much more to consider in any real estate transactions, which is why most home buyers and sellers choose to work with real estate professionals.
Just how important is location? A National Association of Realtors (NAR) survey found that although affordability ranks high in importance, the buyers' focus on neighborhood, distance from work, access to shopping and schools demonstrate that location is indeed significant.
People who have bought real estate, especially those who have had a number of transactions, are aware of the value of location. However, first time home buyers should be careful to choose a location that meets their needs, even if it means paying a little more. A bargain found in a less-than-advantageous location might look like a good deal, but its chances for resale may be lower.
The NAR survey found that value of location is unique to the buyer interests. Homebuyers with growing families are likely to look for a neighborhood with proximity to work and schools. Retired homebuyers consider availability of shopping a higher priority, the survey shows.
Neighborhoods are key to the buyer when searching for a specific environment. For example, neighborhoods surrounding elementary schools tend to attract families with young children. The neighborhood won't necessarily change, since families whose children are now grown find other locations more convenient, and are apt to sell, creating sufficient turnover for new families with younger children.
Buyers who own two cars also tend to rank closeness to schools higher than nearby shopping, work and other factors, such as public transportation, churches and recreational facilities.
It's important for potential buyers to examine what ranks high on their own lists of priorities before they begin the house-hunting process. In that way, they'll have a clear idea of what amenities and services are available in the community they want to join.
The value of a house can change after its purchase. However, any change is likely to be gradual and will depend on factors, such as the age of the home. Older neighborhoods tend to change more gradually. Houses located near an institution, such as an elementary school, are usually a good investment since their worth is related to a factor that is long lasting, in this case, the school. In some cases, a buyer may want to sacrifice an asset such as proximity to a school, if a larger house farther away is more affordable.
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors. Send questions on any topic to: Ask Your Realtor, c/o SILVAR, Los Altos District, 345 San Antonio Road, Los Altos, CA, 94022; call 650.949.9115; or send email to ppompei@siliconvalley-realtors.org.
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