#1. Spend time educating yourself on valuations. Have your broker compile a list of comparable sales for you to review. Study them like it’s the night before the S.A.T. Try to understand how other closed sales were valued.
#2. Ask yourself what is better or worse about each comparable property. Pay attention to $psf. Take notes. No seriously, take notes.
#3. When looking at Comps, listing photos are nearly ALWAYS better than the actual condition. Bathrooms are always less exciting in person. Ok, nevermind the bathroom…how’s the view?
#4. Pay attention to when the sale closed. How was the market different then? Was it pre or post covid? Pre-covid sales were about 10% more expensive. Don’t quote me, this is a moving target as the market comes back. It will probably be 9% by the time you are done reading this article.
Read More: Sell Your Home (Before it Hits the Market)
#5. Don’t put too much weight on what is currently active on the market- unless it is a very similar property. Many sellers price too high.
#6. Adjust if a property has higher or lower than average carrying costs. Think about how much an extra expense of $500 or even $1000 per month in carrying costs will affect the affordability.
#7. Ask yourself what is special about this property? Will people want to buy it when it comes time for me to sell? If yes, you are on to something good. Keep digging.
#8. Did you instantly love the property? In that case, someone else will likely have the same reaction. Lower your discount expectations a bit, the goal here should be to simply acquire it before someone else does. It’s smart to pay up for something high quality or scarce. It will appreciate in the long run. You can retire with the profits.
#9. Does it need renovations? How much will it cost you approximately to make the property look fabulous again? Add that on to the purchase price and see what else has sold previously in the building or neighborhood that was renovated. Will the market bear the total cost of buying and renovating?
#10. Work with a smart buyer’s agent. As much as you think you know, there is equally as much you don’t know. Having a savvy and well-connected agent- especially in the super-luxury segment will yield good market intel.
#11. Views are worth more than you think.