Residential real estate refers to properties occupied by one to four family members. These may be
owner occupied or
leased. The price of
residential real estate is determined by a the mood of the market. The seller may quote the price but the worth of a house is ultimately decided by the buyer's
willingness to pay for it. The
residential real estate market is like the stock market since there is no definite formula that can be employed and one makes or loses a fortune depending simply on the aggregate behavior of millions of buyers and seller operating in the market.
Price estimation in the residential real estate market:
The
residential real estate market has seen a boom since the last few years. This has been caused by the
excess demand for houses stemming out from the
long cherished dreams of Americans. The purchasing of
residential real estate properties has been made easy by falling interest rates on home loans. However investors and
professional appraisers hired by people ensure that one can make the most out of the sale.
From the buyer's side, determination of the actual value of a
residential real estate is a tiring process and involves a step by step procedure. The buyer must calculate the data on the prices at which similar properties in the vicinity have been sold. This requires full involvement of the buyer because in certain cases, finding an exactly similar sale might be difficult. In that case the
square foot pricing method becomes handy and the
average price per square foot for different properties in the particular region gives a good enough estimate.
All this is more easily said than done since collection of data is not an easy job in case of a
residential real estate investment. The
MLS (Multiple Listing Service) provided by
realtors or
comparable sales info from
tax records may serve the purpose.
However, time available with the seller decides his share as a hurry to sell forces him to agree to the conditions laid down by the buyer.