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10 Rules You Need to Know Before Buying or Selling Your Home
Buying or selling your home is one of the hardest things you will have to do.
— -- Buying or selling your home is one of the hardest things you may have to do, and housing report data can only add to the confusion.
A recent report by The National Association of Realtors showed that though more Americans bought homes in 2014, total sales slipped because first-time buyers are being priced out.
For a quick boost, here are tips for first-time home buyers navigating the shifting market. ABC News turned to Spencer Rascoff, the CEO of Zillow, the nation's No. 1 real estate website with more than 90 million users each month. Rascoff was named one of America's most powerful CEOs under 40 by both Fortune and Forbes. And that’s not all: At age 24, he founded the online travel discount site Hotwire and later sold his company to Expedia.
Now he’s on a mission to help you get the best bang for your buck, whether you’re in the market for a new home or looking to sell your existing one. Rascoff’s new book, “Zillow Talk: The New Rules of Real Estate,” uses data to debunk real estate fiction and give you practical, money-saving facts.
In an interview with ABC News chief business and economics correspondent Rebecca Jarvis, Rascoff revealed 10 rules of real estate you need to know before buying or selling your home -- from how to spot the next hot neighborhood to whether it's better to renovate the kitchen or the bathroom when it comes to resale value.
Here Are 10 Money-Saving Rules of Real Estate
1. Best Time to List Your Home
Nationwide, the best time is mid-March. But if you live in colder climates, it gets pushed out to mid-April. In warmer climates, it's a little bit earlier in March.
The Internet has changed this rule a little. Rascoff suggested potential sellers wait for the influx of listings in the spring to pop up on the Internet, and the best time to list is a couple of weeks after that influx.
“Once buyers have been drawn into the market, they started looking online but they haven’t yet selected which home to buy. Pay attention to listings on the Internet in your neighborhood and wait until two or three weeks after new listings start to bloom and then you hit a sweet spot,” said Rascoff.
2. Should You Buy the Worst Home in the Nicest Neighborhood?
No, this is a common misunderstanding in real estate.
Millions of pieces of data analyzed for Rascoff’s book, “Zillow Talk,” determined the worst home in the best neighborhood will not appreciate that quickly.
“You’d be far better off buying the best home that you can afford as long as it’s not the worst home in that neighborhood,” Rascoff said.
3. Male vs. Female: Which Real Estate Agent Will Get You the Best Bang for Your Buck?
According to Zillow’s research, gender does matter. Zillow’s data suggests if you want to buy a home, look for a female real estate agent. She will be more willing to negotiate and close the deal faster.
If you want to sell your home, you might be better off looking for a male real estate agent, who, according to research, will get you closer to the original asking price.
“Women sell homes faster because they’re more willing to negotiate," Rascoff said. "Men are a little bit more stubborn. But men also do a better job at selling the home at the original asking price."
4. Is It Better to Always Buy Instead of Rent?
You’ve heard your parents say it, you’re throwing away money if you rent. According to “Zillow Talk,” research shows this is not entirely true.
Typically, if you’re going to be in a property for two or more years, you should buy it, Rascoff said. However, there are exceptions, depending on where you live. There are huge regional differences in Miami, in Atlanta, in Detroit, Rascoff said.
“If you’re going be in a home for just one year, you ought to buy it instead of rent," he said. "But in Manhattan, that break-even is over five years, so you should probably rent instead of buy.”
5. Fact or Fiction: It’s All About Location
You’ve often heard it’s all about owning a home in the hot-spot location. Rascoff said that is a big real estate misunderstanding.
“Once you know about an up-and-coming, hot neighborhood, it’s already happened,” he said.
His research shows home values in hot neighborhoods appreciate much more slowly than in the neighborhoods nearby. If you're house hunting, the key is to look for the neighborhood surrounding the up-and-coming neighborhood.
6. How to Spot an Up-and-Coming Neighborhood Before It’s Popular
One word: Starbucks.
Rascoff studied homes within a quarter mile of Starbucks, and his research revealed homes near a Starbucks appreciated at 96 percent over a 17-year period, whereas other homes nationwide appreciated at only 65 percent.
Rascoff explained why: “Hipsters are great at identifying what are up-and-coming neighborhoods, and Starbucks’ real estate group does a great job of analyzing data to figure out where to put their locations.”
7. When It Comes to Resale Value, Is It Better to Renovate the Kitchen or the Bathroom?
Bathroom. Buyers have distinct taste and may not like your expensive remodel featuring granite counter tops and a decorative backsplash.
“Spend just a little bit of money sprucing up the home, improving the bathrooms, and you’ll get a much better return,” Rascoff said.
8. If I Renovate the Basement, Will it Increase My Homes Value?
No. Don’t waste money renovating the basement. If you can, add a story instead.
“Another mistake is renovating a basement," Rascoff said. "People usually think that renovating a basement is a great investment. The problem is buyers have distinct taste. Some people want an exercise room in the basement, some people want a kids' play room, some people want a theater. And whatever you put into that basement might not be the right decision.”
9. Street Names Matter
A house on Elm Court will sell for more than a house on Elm Street.
If you live on a "court," "way" or "lane," your home could be valued around 2 to 3 percent more than a home on a "boulevard" or a "street."
“The more unique [the] name, the better," Rascoff added. "Thunder Road, Penny Lane: Those are great.”
10. There Is Money in the Numbers
Stay away from the number 666 and the number four.
666 is bad luck in American numerology and can decrease the value of your home by 2 to 3 percent.
In Chinese culture, four is an unlucky number. So make sure your asking price doesn’t have fours if you’re selling and you could have a Chinese buyer.
Instead look for lucky numbers 316 and eight.
Rascoff suggested looking for an address that has 316 or, when you’re listing, putting 316 somewhere in your asking price.
Eight is a lucky number in Chinese culture. If you’re selling your home in an area with more than 10 percent of buyers who are Chinese, that can mean a 2 to 3 percent difference.
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