5 Interesting Facts Everyone Should Know About Real Estate

The real estate industry, full of intrigue, has always been one of the most lucrative markets to earn a good return on investment.

The real estate market offers opportunities to agents of all levels of experience. There are platforms that let real estate agents earn massive rewards and 100% commission.

Here is the list of five interesting facts that you should know to keep yourself abreast of the knowledge of the real estate sector.

1- Everything is Negotiable

In every housing transaction, sellers prefer receiving the highest price, and buyers want the best deal. Hence, negotiation is the key to real estate sales.

Real estate involves the largest asset that most people own. The objective of negotiation is to agree on price, timelines, contingencies, and items related to the property.

• Price: Buyers do not want to price themselves out of a resale in the future, whereas sellers look for deals that give them good profits.

• Closing costs: Buyers and sellers can negotiate on closing costs, which are one-time fees, such as origination fees and appraisal fees for buyers, and transfer taxes and warranty premiums for sellers. Both can ease the financial burden by including these costs in their offer.

• Closing date: Both parties have the flexibility to negotiate on the closing date as per their requirements. Other factors that have an impact on the closing dates are contingencies and mode of payment. A high number of contingencies can increase the closing schedule, whereas an all-cash purchase can shorten it.

2- Some Buyers Are Difficult to Please

It is a fact that the renovation of the house increases the value of your property. However, sometimes it is difficult to convince and please buyers to make the purchase, even when you have spent money on renovating the house.

It is because they may not like the choices you made while upgrading the house.

Therefore, the safe move for the seller is to allow a flooring allowance or paint allowance. It eliminates the unnecessary spending of money when getting the home ready to sell.

3- When Priced Right, Your Property Sells Fast

Pricing is a crucial decision in the selling process. A balancing act is to quote the right price for your home when selling it. Sellers turn away a potential buyer when they set a high price. A buyer may not even see a seller’s listing when searching online if the house is priced too high.

A strategy to price the property right from the start maximizes the number of qualified buyers. A comparative market analysis is essential for each potential listing:

• Set the price floor: Prices of three-four comparable homes sold recently project the lowest or average price for your house.

• Set the price ceiling: Prices of three-four comparable homes that are still in the market for sale or removed after a long wait project the price that you should avoid quoting for your house.

• Current competition: Prices of three-four comparable houses currently in the market help you determine the maximum quote for the house

4- Investing in Real Estate is the Best Protection Against Inflation

Inflation is a decrease in your buying power as the prices of goods and services increase. Real estate investments act as an inflation hedge, as home values and rents typically increase during times of inflation. Inflation hedge involves investing in an asset that maintains or increases its value over some time.

• Appreciating aspect: One of the features of real estate is appreciation. As per an analysis by Zillow, the property value appreciates between 3% and 5% annually. Real estate investments not only help to keep up with inflation but also add value and gain appreciation.

• Increasing income: Real estate investments help generate regular income in the form of rent generated from tenants. If one manages rental properties well, it can result in an annual increase in the rent, which helps fight inflation.

• Depreciating debt: The value of real estate assets appreciates with the rate of inflation. However, the debt owed on the property depreciates with inflation, as the payment value will be less as time goes on.

Thus, real estate is one of the best ways to beat inflation.

5- The Real Estate Market Will Continue to Grow

The growth of the housing market will continue in late 2020 and 2021, despite economic and political instability. Indicators used to predict market growth are trending upwards as per the housing market forecast by Realtor.com.

• Buyers prefer affordability: Buyers tend to move to affordability. Thus, benefiting smaller and mid-sized markets.

• Home prices: As per the prediction, home price growth will flatten, with an increase of 1.1%.

• Supply: Inventory or supply will remain low. However, the rate of decline will be steady soon, shifting supply towards greater availability of lower-priced homes.

• Home sales: Home sales will continue to decline by the end of 2020 due to low inventory.

• Mortgage rates: Mortgage rates remain low and may fall under 3% by the end of the year.

Final Thoughts

The real estate industry attracts the interest of many due to the amount of investment involved in it. For most of the population in America, their home is their biggest asset.

Being informed is crucial when you are making big financial decisions. Take the time to educate yourself before you commit to buying or selling any property. You can leverage the knowledge of real estate agents to get the best deal.