Price Vs. Value When Shopping for a House
When shopping for a home, one of the most important factors is the price. Although price is and will always be a factor, there is something that is possibly more important—the value. Now, before you think that I am just spinning some tangled story, consider these points:
“BUT IT’S CHEAP!”
I am a self-professed cheapskate, so I love a good discount. However, there is a difference between cheap and a good deal. Ideally, it is a good deal because it is cheap, but be careful that it is not discounted because of inferiority. When one property is cheaper than another, it seems like a good deal…but is it really? Just because it costs less does not necessarily mean it’s a better deal. Is it cheap for what it is or is it expensive for what it is? For example, lets say you have a 2 bedroom 1 bath fixer upper house for $40,000 and next door is a 2 bedroom 1 bath move-in ready house for $55,000. Yes, on the surface, the $40k seems like a better buy, but if it needs a new roof, foundation repairs and/or extensive remodeling, then will it really be all that “cheap” by the time you are said and done? It may actually be cheaper to buy the more expensive house in the long run. Be sure you are comparing apples to apples and not apples to icecream.
HIGHER COST = BETTER?
On the other hand, just because something costs more doesn’t necessarily make it better. It might (and in a perfect world, it should), but sometimes the cost doesn’t necessarily correlate with the value. Does it cost more because of the desirable location, the upgrades, the extra bedroom? Or does it cost more because the seller thinks it’s worth more? We’ve all seen examples of products where the off brand works just as well, if not better, than the name brand. Compare the features and make sure the value is truly there.
VALUE IS SUBJECTIVE.
Value is an abstract concept that can have quite a wide range to different parties—such as the difference in value in the opinion of a buyer, a seller and an appraiser. A buyer thinks it’s worth $10, a seller thinks it’s worth $15 and an appraiser thinks it’s worth $8.98. (Yes, that was a bad Realtor joke for you!) Value is subjective, which makes the saying “it’s only worth what someone is willing to pay for it” so very true. What is worth full price to one person is only worth half the price to someone else. Everyone has personal likes, dislikes and ideas about value and price. When house shopping, be sure that you are comparing the value of location, condition and amenities—not just the price. Of course, price will always be important, but it is important to make sure the value is there and is priced accordingly to make sure you hit that perfect mix of value and price to snag a true deal!
Lisa E. Priest loves a good deal and is a local real estate Broker/REALTOR® and Property Manager with Picket Fence Realty, Inc. You can reach her via phone or text at 903-948-3343 or read more at BuyPalestine.com