Most likely, you have heard the common sayings, "real estate is local," "location is everything," and "location, location, location." Media say it; real estate agents say it, and almost everyone else. So it must be important, and it is, in fact, crucial. But what does it mean when we say real estate is local?
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Here is an itemized summary of what it means when we say "real estate is local."
(1) Real estate location and value. The property location is crucial since it directly impacts its value—the more desirable location, the more money.
(2) Real estate market subdivided market. The real estate market is subdivided into independent niche markets because of the real estate's nature. For example, there is a considerable price difference in the Willowdale community if the property is located South or North of Finch Ave. The reason for such differences is sometimes apparent and other times not so much. Perhaps, it is because of a trend or belief in a community.
(3) Competing local homes. The competing homes are typically located in the same niche market. The value of each home is based upon the comparables within the niche market area.
(4) Local city roles and regulations governing real estate. The local city may have distinct roles and regulations governing real estate within a real estate market. Such rules may influence the properties' desirability for general populations and professional real estate investors. Hence, local roles and restrictions likely will affect the property prices in the market. For example, cities may designate certain regions as a conservation area; therefore, many restrictions may apply.
(5) Buyers and sellers belong to different markets. Typically, different real estate markets have distinct buyers and sellers; therefore, one market has a minimal or no impact on the other. You may buy a condominium for one and a half million dollars in central Toronto, and a buyer may purchase a four-bedroom house for six hundred thousand dollars in Barrie. The take-home message is that these two buyers are specific to two different markets, and they have little impact on the other market.
How do you benefit from having an understanding of the concept of real estate location?
Many articles are covering numerous aspects of real estate transactions. You may have come across tips for buyers or sellers, tips for types of properties and so on. However, having a grasp of real estate's nature when it comes to location, I believe, is the most important. You may end up saving a lot of money and perhaps avoid buyer's regret.
What do real estate investors do to avoid the location trap?
You may ask yourself what do professional real estate investors do. Successful investors repeatedly apply the same method and come out with desirable properties most of the time.
I decided to get in touch with a few old-time friends, successful and veteran real estate agents and investors. With two questions in mind, (1) what do they think of real estate location and (2) what approach do they consider? We all agreed that it takes many years to get to know any specific community and the real estate market. Each market is distinct, complex, and many elements influence its desirability-as I have outlined at the beginning of this article. To overcome this issue, real estate investors seek local real estate agent's expertise and knowledge. It is common sense; only an experienced local real estate agent will fully grasp the local nuances.
Why should you hire experts specialized locally to work for you?
You may come across real estate agents who advertise or claim they are experts in multiple communities across Greater Toronto Area. It is a notion that is hard to sell. Do not gamble with the most important transactions in your lifetime.
It is wise to know how experienced real estate investors operate and hence literally copy what they do. If it works for them, there is a good chance it is the best option for you as well. Hire the most experienced and knowledgeable local agents to work for you.
A home location (real estate market) is the most important factor in determining the home value. Real estate markets are distinct and independent from each other that rarely have any impact on each other. Because each real estate market also has it district buyers and sellers. A full understanding of the elements influencing a properties location is complex and takes many years to attain the expertise necessary. The old saying of "real estate is local" is a great advise. You should to tap into the local expertise and knowledge to take the full benefits that works for you.
Author The above Real Estate article was provided by David Khosravi, a leader in his field in North York, Willowdale Real Estate, Reach out to David via email: firstname.lastname@example.org or by phone: 416.990.2424