Why the Rule of Location Matters in Real Estate

Why the Rule of Location Matters in Real Estate

Since I was a child I have always been intrigued by real estate, and what my parents always said “Location, Location, Location” – I have carried that lesson forward in my life, as a REALTOR and an Associate Broker in Delaware, I see examples of this rule every day, but realize that most consumers don’t really understand what that means.

The first thing to consider is the value of your time. Depending on your profession, your social relationships, education, and interests there are certain things you will find more valuable than others. Typically people value their free time, that time when they are not working, over the time they do work. How does this come into play when we are discussing real estate? It’s fairly simple really.

It matters a great deal, more so than any other factor, to better understand let’s look at an example. The best example of the rule of location in real estate is to look at any major City in the world. For this example let’s take New York City.

The location of this kitchen determines it's cost.

The location of this kitchen determines it’s cost.

I went to high school on Long Island and college there as well as in Manhattan (what most consider New York City to be, but the city proper is an area that consists of five separate boroughs – Manhattan, Queens, Brooklyn, The Bronx and Staten Island), so I speak from experience.

The closer you are to Manhattan’s primary business districts, the higher the cost is for real estate. Once within the City limits, in any community, the closer you are to public transportation the more premium is placed on the value of the real estate.

This rule follows to the commutable suburbs as well. For instance if someone worked in Midtown Manhattan (The area defined as between 34th Street up to 57th Street) and lived on the Upper East Side of Manhattan, you would have the quality of life that is most desirable to those who work and live in Manhattan. The convenience and proximity of your home to your workplace, as well as the convenience of access to Central Park, the East River, great restaurants, stores, etc. You could be at your office within 10-15 minutes with little effort or inconvenience, or expense. For this you could be paying well over $5,000,000 for a reasonably sized condo, even more for a private home (aka Brownstone).

The other end of the spectrum is the individual who works in Midtown Manhattan and lives in the suburbs, whether on Long Island, West Chester County, or a multitude of New Jersey Counties, you would be looking at 10-15 minutes from the train station in Manhattan to your office, add to that the 45-90 minute train ride, plus the drive to the train station if you don’t live within walking distance, and your quality of life drops significantly. You are potentially spending 1.25-2 hours per day, each way, commuting to your office to work. If you work an 8 hours day, that ends up eating a huge portion of your day, and therefore leaving very little time for anything else.

Most of my friends who work in Manhattan and commute leave their homes before 6:00am to get a train and guarantee they are at work by 9:00am. Then on the return home, some will stay in the city for events, meetings, meals, or just to avoid the rush hour squash of the commute, and get home after 9:00pm. To then get a reasonable amount of sleep to be able to wake and do the whole thing the next day leaves very little time to do anything else.

This is where the rule of location comes into play, and should be extremely obvious to you now. The closer you are to your place of business, the less time you have to spend getting there and back, the more time you have to enjoy the quality of life afforded you by working.

When I help my clients review their options for locations, one factor that I always try to review with them is what their goal is for their real estate purchase. We will review a list of things that are important to them in their life, and also what their goals are. Frequently people are steered toward the shiny new construction projects which tend to be a lot further from the business hubs where they work.

Everyone wants new and shiny, but most consumers don’t understand that there are more important factors in a real estate purchase than the gloss of the finish. The value of location has a direct impact on the cost of real estate because the convenience of being close to the places you want to be, or need to be, does hold a premium to many.

If you have two identical 3,000 square foot homes, what would the price difference be if you were in the Wilmington, Delaware area and purchasing in Delaware (we have quick access to Pennsylvania, New Jersey and Maryland, so I don’t want to stretch out of the New Castle County Delaware area).

Let’s say that the first house is 3 miles from your place of work, was just built in 2014, has 4 bedrooms, 3.5 bathrooms, 3 car garage and a half-acre lot. All the finishes are high end, a gourmet kitchen with granite and top of the line cabinets, hardwood floors throughout, iron banister for the stairs and cat walk, a stone two story fireplace, and architectural details throughout. The cost at the near work location is $750,000. From this house you have the option of going home for lunch.

The second house is about 35 miles away, and you have to cross the Chesapeake & Delaware Canal to get there, it is identical to the first house as it was constructed by the same builder, but in this location the cost is $375,000. Better pack your lunch – maybe even dinner, definitely a snack, with traffic, construction and congestion you will be lucky to make it home in time for dinner.

If price didn’t matter, which would you choose? Hopefully this has helped demonstrate the true value and reason behind the old saying “location, location, location”.

The Importance of a Home Buyer Consultation with a REALTOR

The Importance of a Home Buyer Consultation with a REALTOR

You found your dream home online and now you want to see it.

Call a REALTOR for a great real estate buying experienceYou call the phone number listed on the website and get a REALTOR. You inquire about the property and request to see it right away. The REALTOR insists upon first meeting in their office prior to showing you the property. Despite your protests, the REALTOR is insistent upon the meeting.

You hang up, frustrated, immediately calling another REALTOR you find online. The second REALTOR requests the same first meeting, you only want to see this house yet none of the REALTORS want to show it to you. Or do they? The reality is that meeting with a REALTOR prior to seeing a property is a proven method of helping you, the consumer, have a better real estate buying experience.

The True Professionalism of a Consulation
Buyer Consultations are not a new concept, they have been around for as long as real estate agents have helped people purchase real estate. The purpose of a Buyer Consultation is to let a real estate professional understand your needs, determine what your requirements are for a property, review the process and procedures of a real estate purchase and help you determine what your purchasing power is. The result of a consultation is proven to be a far less frustrating real estate purchasing experience.

Why do most consumers get defensive when a REALTOR requests a meeting first? There is a conditioning in the society to believe that a REALTOR offers no value other than the ability to open a door and allow you to view a house. That is far from the scope of what a real estate professional does, in fact it is the tiniest portion of the work they do. Understanding the real value of using a real estate professional will help you, the home buyer, truly appreciate what it means to have an Agent who represents you in your real estate purchase.

The first step to understanding this is to meet with an experienced REALTOR and review your needs, as well as mutually set communication expectations and review the process. Despite your apprehensions to slow down and step back when you feel like you are ready to go, you need to overcome the urgency to determine what is truly important, realistic and reasonable for your market place. A REALTOR will ask you questions about what you are looking for, should take extensive notes, be able to introduce you to their business partners such as loan officers and title representatives, who all play an essential role in getting you from this appointment to home ownership.

A Good REALTOR Makes the Process Seem Effortless
If a REALTOR is good at what they do, you will believe the process to me mostly effortless, because their job is to keep things on track and make sure no obstacles pop up on your way to your closing on the new home of your dreams.

Remember, perception isn’t always reality, while a REALTOR may have to jump through hoops, make many trips to the property without you, facilitate papers being sent to many different parties involved, to get you to that exciting moment when you get the keys, their job isn’t to show you all those things and perhaps that is part of the problem with public perception. Just like a great magician, the trick should be effortless and impossible to see all the work that goes into making it happen.

The next time a REALTOR wants to meet with you before showing you a house, be confident that you have a true professional, focused on your needs, and not just someone who is opening doors so you can browse through a house that might not be right for you.

Pulling Back the Curtain of the Real Estate Industry

Nothing frustrated me more than the current contentious state of relations between the real estate professionals, the real estate industry and the consumer.  Add to that the confusion of all the resources for finding real estate, and the lack of accuracy in some of those resources.   Media companies portraying themselves as “service” sites, while selling advertising to real estate professionals, spending to capture and establish trust with consumers, and then in turn selling the consumers contact information to real estate professionals as qualified “leads”.

In some ways it has become a game of who has the biggest budget, who can manipulate the public perception best, and therefore dominate a market.  The truth is that service is the core of the real estate transnational process.  I have spent the last 8 years helping to educate real estate professional on how to best serve the needs of their clients, through clear and concise communications, client education meetings, mutual expectation discussions and more.

Being a Consumer Advocate
During this process I have long wanted to address the consumers, the sellers and purchasers of real estate, to help facilitate a positive experience, and revise the public perception of what a “Real Estate Agent (Broker/Associate, etc)” is.  I believe that time has come, if not past, and as I see more predatory methods being used to monetize the listings of real property, the native distrust of the real estate professional by many consumers only allows those seeking to profit more opportunity.

There comes a point in time when the curtain needs to be pulled back and the “wizard” behind exposed for all to see the truth.  The goal of EstateSocial.com is to pull that curtain back, to discuss the industry, the process, to help remove misconceptions and prevent misunderstandings between consumers and professionals.

There is so much more to the business of real estate than the two aspects of the professional and the consumer (or client).  There is the brokerage model – and how the business of a real estate brokerage works.  There are many models and agents/licensees decide who to associate with.  By shining a spotlight on the industry and the process the goal of EstateSocial is to facilitate a great understanding and appreciation of what a real estate professional offers a consumer, and to help those professional understand many of the common concerns, or confusion, of the real estate consumer or client.

A Great Divide
There is a disconnect between the real estate consumer and the real estate professional.   A great part of that disconnect is the lack of understanding of how the process of buying and selling real estate works.

On the other foot, the real estate professional sometimes forgets the magnitude and impact of a real estate transaction on an individual, couple or family.

Between professional jargon and acronyms, consumers often are lest wondering what is going on.  What is a FSBO?  What is a CRS? ABR?  REALTOR or Realtor or realtor?  What is the difference, or is there a different between a realtor, licensed real estate agent, broker, etc.

Many terms are often used interchangeably in various media outlets, when in fact they are not.  Consumers need answers, and real estate professionals need reminders of why we all are doing this – as professionals and consumers – to help people.

Customer Satisfaction Starts with Understanding
Real estate, as an industry, is really about customer service and satisfaction.  Serving the needs of the client, putting their best interests first in a real estate professional capacity as their representative (aka Agent).  The consumer needs to understand that the real estate professional works for them, how they are compensated and why “keeping our options open” when looking for a property is more often a disservice to the consumers needs rather than an advantage.

By facilitating conversation, answer questions and providing explanations, EstateSocial.com hopes to help bridge the gap between consumers and professionals to provide a better understanding, mutual appreciation and less frustration on both sides.

Estate Social is a place for consumers, real estate professionals and conversations between the two.  To encourage understanding, compassion and a positive outcome for everyone who buys, sells or transacts real estate in any capacity.