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An Educated Buyer = a Confident Buyer

by sfishome on July 13, 2006

When I represent Buyers, my first and continuous goal is to educate them on “their” market (the areas and homes they want), on the Buying process, what to look for in homes, the Offering process and more. Many Buyers today want control over the process, so I also offer the most advanced internet tools on the market so they can educate themselves as much as they want. Why is knowledge so important? It might seem like an obvious answer, afterall, everyone knows the “knowledge is power” axiom. But in an expensive real estate market like San Francisco, knowledge is also confidence. The “average” property in San Francisco is $750,000. But if you’re looking in some of the most sought after neighborhoods like Pacific Heights, Russian Hill, Noe Valley, etc, $750,000 is practically entry level, so you’re looking at $1 million and much higher. “Buyer’s remorse” at these price points can be severe. So what knowledge is the most powerful when buying? I’ll attempt to list the key things here:

1. Market trends and conditions for “your market” – if you want a Noe Valley 2bed 2bath Condo, then you ought to find out how many sell per month, the average price per Condo, the average size in SqFt, the average price per SqFt, the average Days on Market (DOM) it takes before they sell, and how much they sell for vs. the “asking price”.

2. You can take the above a step further and see how these above numbers have changed from year to year, or quarter to quarter. Has the market picked up, or slowed down?

3. How many For-Sale homes matching your criteria are on the market right now, vs. those that are in contract now, and those that have sold in the last couple of months. If there are many more listings than sales, you’ve got a slow market, but if you only have a couple of For-Sale homes to look at with a bunch in contract, you know you need to act quickly when you find something you like.

4. How much you can afford – hint, speak to a lender before doing any serious house hunting or you’ll be wasting your time, or worse might miss out when an opportunity arises.

The above are just some basics that if you have, you’ll have an edge over less educated Buyers, AND will give you the confidence to know when something really is or isn’t an opportunity. It would be a shame to find out a month after moving in that you over-paid by $50,000 or even $10,000. It’s also a shame when you under-bid on a $1 million property by a “mere” $10,000 when you would have gladly spent that to get that particular home.

A good Buyer’s Agent will not only do the above research for you, they’ll analyze and interpret the data, they’ll prepare a new report everytime you find a home you want to make an offer on, and they’ll KNOW that only through a very thorough education process will you feel confident in your decision, and great about your new home many months or years after you move in. Good data, and a great Buyer’s Agent, are worth their weight in gold.

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