Buying New Orleans Real Estate
When it comes to New Orleans real estate, we’ve come across a lot of buyers that get hung up on comparing the asking price for a property to the price the owner paid, no matter how many years or decades ago that might have been.
Tough love ahead: as hard as it might be to wrap your head around, there are several reasons why what the seller paid for a home has absolutely no bearing on what a buyer should consider a fair offer.
Markets and values change
No surprise here, but home values move up and down with supply and demand. If you were in New Orleans post-Katrina, you saw that play out on the West Bank, where houses sold for exponentially more in October 2005 than in July 2005. When the condo rush hit the Warehouse District in 2016, prices went up more than 40% in just 18 months. Neither of these events took into account what an owner paid for a property.
Improvements = Value
This is directed at the folks searching for renovated properties. Just because an investor scooped up a house on the cheap doesn’t mean that they didn’t pour tens or hundreds of thousands into the remodel. Again, that purchase price has nada to do with the end result and value.
PRO TIP: Some savvy buyers have begun checking out what permits were pulled by renovators and attempting to judge the value of the renovations. What most forget is that the amount of the permit doesn’t include time (which is money) and labor (which is more money) and any other improvements (yet more money) done that didn’t require a permit at all.
Your REALTOR Can Help
Pricing is what we do. Before our clients write offers, we’ve shared comparable sales and had a discussion about the both listing price and what comparable homes are selling for. As always, the services of a fantastic buyer agent don’t cost you a dime, no matter how much the house costs or how little the seller paid.