Author: Matthew Carpenter

Is San Diego Real Estate a Good Investment?

San Diego Real Estate Investment Outlook

Should you consider San Diego real estate investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2022 and 2023. Although this article alone is not a comprehensive source to make a final investment decision for San Diego, let’s look at the state of the San Diego real estate market and the factors driving the property market short and long-term.

Affordability has become an issue for many homebuyers in the San Diego area. This is another housing market trend that is affecting many major cities across the country but particularly in the western coastal markets. How big is the San Diego housing market? San Diego is a moderately walkable city in San Diego County with a population of approximately 1,305,700 people.

It is the second biggest California city and one of the ten biggest cities in the country. San Diego is one of the fastest-growing cities in the U.S, and its economy is strong. San Diego is often overlooked in favor of hotter real estate markets like San Francisco and Los Angeles. However, that’s one of the reasons why you should consider investing in the San Diego real estate market. The city of San Diego continues to outpace California’s job recovery, which is good news for San Diego’s housing industry.

The San Diego metropolitan area is known as the birthplace of naval aviation, serving as a major employment center in the nation for defense and in the Southern California region for scientific research, health care, education, trade, and tourism. The significant military presence supports hundreds of thousands of jobs, pays billions of dollars in wages, and has an overall annual economic impact on the San Diego metropolitan area of billions of dollars.

San Diego’s housing market remains one of the hottest in the nation (ranked 10th by Zillow). Since home building takes time, especially in a heavily regulated environment, there’s little chance of diminished demand. San Diego has been one of the hottest real estate markets in the country for many years. During the 20 years from 1998 to 2018, the median home value in San Diego rose by a whopping 217%. But the median household income only rose by around 77% during that same 20-year time frame.

San Diego has a mixture of owner-occupied and renter-occupied housing. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached are the most common housing units in San Diego. Other housing types prevalent in San Diego include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.

There were 4,100 single-family homes and 6,400 multi-family homes built in 2017, compared to 2,200 single-family homes and 7,800 multi-family units in 2016. Today, the general trend for SFR construction in San Diego County is still far below the 2002-2004 numbers. The next peak in single-family residential construction will likely begin around 2021, but it is doubtful to return to the frenzied mortgage-driven numbers seen during the Millennium Boom.

San Diego Real Estate Appreciation Rates

San Diego is in the top 20% nationally for real estate appreciation. NeighborhoodScout.com’s data also shows that in the past ten years, San Diego real estate appreciated by 115.52%. This amounts to an annual real estate appreciation of 7.98%. During the latest twelve months, San Diego’s appreciation rate has been around 16.35%.

In the latest quarter, the appreciation rate has been 2.79%, which annualizes to a rate of 11.64%. Overall, there exists a limited supply of homes in San Diego, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.

The San Diego Housing Market Is a Relative Bargain

California is known for its insane real estate prices. San Diego stands out as a relatively affordable real estate market. The median home price is around $550,000. This sounds bad if you compare it to the national average of $300,000, but it is a bargain in California. You could snap up several San Diego rental properties for the price of one home in San Francisco.

The San Diego housing market is cooling. Home price appreciation fell below 5%, and home prices in some areas are declining due to decreasing demand. This is an improvement over the 6 to 8% appreciation San Diego had been seeing. The expanding inventory of houses on the market makes this a great time to invest in the San Diego housing market.

San Diego’s Housing Supply Is Constrained As New Construction of Homes is Quite Slow

San Diego is a growing housing market. By 2050, the population of San Diego County is expected to grow to 4.5 million, approximately a 50% increase from the population in early 2007 of 3,098,269 people. Population trends have connections with housing trends as it increases the demand for housing supply. However, construction in San Diego has stalled. Single-family residential construction is well below the demand for such homes in the San Diego housing market.

There has been faster growth in the construction of multi-family housing in the San Diego real estate market, but that is also below historic rates. Currently, both single-family and multi-family housing construction is increasing in San Diego. Even though there are more multi-family starts over single-family homes in terms of raw numbers, the percentage of single-family homes being constructed outpaces that of multi-family units.

San Diego also shares several geographic constraints that other California coastal cities do. You can’t build on water. The Cowles Mountains limit how much the city can expand inland, constraining the housing supply. Regulations limit high-density construction, preventing the area from meeting demand with too many tall condo towers. So, do the wilderness areas off-limits to construction like Cuyamaca Rancho State Park and Cleveland National Forest.

The Diverse Student Market Feeds the San Diego Rental Market

San Diego is a major metropolitan area, and it is home to several colleges and universities. The University of California at San Diego is one of the largest. It is sometimes confused with San Diego State University, a different campus, and the University of San Diego. Point Loma Nazarene University is a Christian school in San Diego. National University is located in nearby La Jolla.

Smaller schools like the Art Institute, Alliant International University, Azusa Pacific University, Brandman University, Miramar College, Mesa College, and California College of San Diego fill out the San Diego real estate market.

A side benefit of the diversified student market is that you can buy multiple properties across the San Diego housing market and enjoy a “diverse” investment portfolio. You won’t see demand for the property rise and fall based on the popularity of a flagship school, and the strong San Diego housing market allows you to rent it to newcomers to the area or military officers if you can’t fill the unit with students.

San Diego’s economy isn’t as reliant on tourism as other coastal towns. Instead, defense and the military are a larger part of the local economy. This dumps tens of thousands of renters into the San Diego real estate market who will never buy because they could be deployed elsewhere in a year or two. The military also gives generous allowances for those who rent San Diego rental properties, keeping rents near the military base strong regardless of the state of the economy.

Rents are Going Up in San Diego

The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes. The rental market will continue to grow as the city grows an estimated 500,000 population by 2050, adding tens of thousands each year. The median rent in San Diego is $2700. The rent you’d receive on single-family San Diego rental properties would, of course, be much higher.

If you find a good bargain and make it family-friendly, you could charge well over $3000 a month. If you can convert San Diego rental properties into smaller units, you’d receive around $2200 a month for a one or two-bedroom apartment. The cash on cash returns for properties in the San Diego housing market is around 2.5% for traditional rental properties and nearly 2% if you rent on Airbnb. The fact that the city isn’t too dependent on tourism means you could rent properties on the beach to newcomers, locals, and students if tourism is slow.

Before the pandemic, the average rent for an apartment in San Diego had been growing at 4% year-over-year (source: RentCafe). About 40% of the apartments can be rented for less than $2000, and 60% of the apartments can be rented for more than $2,000 per month. This shows that rent prices are very high in San Diego.

Homeowners vs Renters Statistics: According to the most recent 2020 American Community Survey census data, San Diego County has a renter percentage of 46.7% which is the second most renter percentage of all the counties in the greater San Diego County region. The homeowner percentage is 53.3%. The monthly cost of ownership for property owners in San Deigo is around $2,073.

The median gross rent is $1,658, which is the third most expensive among all other counties in the greater San Diego County region. Comparing rental rates to the United States average of $1,062, San Diego County is 56.1% larger. Also, compared to the state of California ($1,503), San Diego County is 10.3% larger.

San Diego Rent Prices 2022

As of October 3, 2022, the average rent for a 1-bedroom apartment in San Diego, CA is $2,545. This is a 21% increase compared to the previous year. Over the past month, the average rent for a studio apartment in San Diego remained flat. The average rent for a 1-bedroom apartment decreased by -5% to $2,545, and the average rent for a 2-bedroom apartment decreased by -5% to $3,295.

  • Two-bedroom apartment rents average $3,295 which is an 18% increase from last year.
  • Three-bedroom apartment rents average $4,070 which is a 13% increase from last year.
  • Four-bedroom apartment rents average $4,900 which is a 9% increase from last year.

San Diego Housing Market Is More Landlord Friendly For Short Term Rentals

We can’t say that California is landlord-friendly. However, specific cities are better for landlords and real estate investors than others. One reason to invest in the San Diego housing market over San Francisco or Los Angeles is the fact that San Diego is one of the few big cities that doesn’t have rent control. The city has groups fighting proposals to apply rent control to San Diego rental properties in addition to apartments.

San Diego has many tourist attractions. Balboa Park is home to the San Diego Zoo, the Air and Space Museum, the Natural History Museum, the Desert Garden, the local youth Symphony, a Japanese garden, and a golf complex. There’s a SeaWorld in San Diego, an MLB stadium, the USS Midway Museum, and the San Diego zoo safari park. On top of this is the mild weather and proximity to the beach. Any San Diego rental properties in easy reach of these attractions command a premium on rental sites like Airbnb.

Demand for rentals in the San Diego real estate market soars during Comic-Con, one of the biggest comic conventions in the country. The only limit on San Diego rental properties has been the fluctuating rules by the city council, such as a measure passed limiting rentals to primary residences that were rescinded a few months later in 2018. Yet permission for rentals is limited in many master-planned communities and condo developments, keeping rents for Airbnb and other short-term rentals strong.

San Diego Is A Great Place Place To Live In

San Diego is a great place to live which makes real estate investment a lucrative opportunity. It has nice sunny weather and impressive beaches. It has more than 300 parks, including Mission Trails Regional Park, and 40,000 acres of undeveloped open space. Balboa Park has the world-famous San Diego Zoo, Old Globe Theatre, and museums. San Diego Zoo is also one of the prettiest zoos in the world to walk around. U.S. News analyzed 125 metro areas in the United States to find the best places to live based on the quality of life and the job market in each metro area, as well as the value of living there and people’s desire to live there.

San Diego, California was ranked:

  • #36 in Best Places to Live
  • #51 in Best Places to Retire
  • #3 in Best Places to Live in California
  • #5 in Most Expensive Places to Live
  • #9 in Best Places to Live for Quality of Life
  • #12 in Safest Places to Live

San Diego is home attracts millennials with its higher education opportunities and big-city amenities such as excellent restaurants, dive bars or clubs, and great nightlife. The craft beer scene in San Diego is one of the best in the world. North County is desirable for young families whereas millennials are moving downtown and to communities to the northeast as a result of gentrification and the diverse entertainment options centralized in those areas.

Best Places to Invest in Real Estate in San Diego

Are you looking for an investment property in the San Diego real estate market? In any property investment, cash flow is gold. San Diego offers an ideal mix of limited supply, high demand, and excellent income potential. San Diego’s mild climate, miles of beaches, fun attractions, and great schools make the city one of America’s best places to live.

If you’re going to invest in California, it needs to be in San Diego. Good cash flow from San Diego investment properties means the investment is, needless to say, profitable. On the other hand, a bad cash flow means you won’t have money on hand to repay your debt.

Therefore, finding the best investment property in San Diego in a growing neighborhood would be key to your success. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. You should focus on neighborhoods with relatively high population density and employment growth.

Both of them translate into high demand for housing. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your San Diego rental property and you should be able to get a good return on your investment over the long term.

The neighborhoods in San Diego must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in San Diego might not be the best place to live in.

A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods. The inventory is low, but opportunities are there.

Some of the popular neighborhoods in or around San Diego are Carmel Valley, Rancho Bernardo, Point Loma, Pacific Beach, Mission Valley, Mira Mesa, Rancho Penasquitos, Bonita, Del Cerro, North Park, La Jolla, 4s Ranch, Mission Hills, Otay Ranch and Rancho Santa Fe.

As we write this, the asking price of single-family homes for sale in San Diego (on Realtor.com) starts from $132,000 for a 3-bedroom house and can go up to $37M for a luxury 10-bedroom house located in the Northern San Diego neighborhood.

You can get a beautiful 3-bedroom new construction single-family house for around $379,000 in the Southern San Diego neighborhood — which is quite an affordable entry price as San Deigo home prices are some of the most expensive in all of the United States.

Here are some of the best neighborhoods in San Diego where you can buy an investment property.

Encanto is one of San Diego’s most affordable neighborhoods if you want to buy an investment property. According to Neighborhood Scout Encanto’s median real estate price is $469,345, which is cheaper than 71.3% of California neighborhoods and 21.5% of all U.S. neighborhoods. Encanto is a hilly neighborhood located in the southeastern part of San Diego, California. The neighborhood of Encanto is split into two sections, North Encanto (which lies north of Broadway), and South Encanto (which lies south of Broadway).

The name Encanto usually refers to the neighborhood of Encanto, but it can also refer collectively to the neighborhoods of the Chollas Valley planning area, which consists of Chollas View, O’Farrell, Lincoln Park, Emerald Hills, Valencia Park, Broadway Heights, Alta Vista, Rosemont, as well as Encanto. The citizens’ community planning group that represents these eight neighborhoods in accordance with the City of San Diego Council Policy 600-24 is named the Chollas Valley Community Planning Group.

The Encanto Neighborhoods Community Plan is designed to expand the existing retail, commercial and light industrial areas along the main transportation corridors and the villages surrounding the trolley stops at 47th and Market streets, and Euclid Avenue and Market Street. Its cultural heart is the Market Street Village, situated along Chollas Creek, and the trolley stop at the intersection of Euclid Avenue and Market Street.

With its proximity to San Diego Bay just 2 1/2 to 5 miles away, temperatures tend to be mild. The area offers excellent opportunities for infill development, including commercial, transit-oriented mixed-use along the main corridors, and view lots for single-family residential in the surrounding hills.

Nestor is another relatively affordable neighborhood in San Deigo having a median real estate price of $579,106, which is more expensive than 42.9% of the neighborhoods in California and 84.6% of the neighborhoods in the U.S. The average rental price in Nestor is currently $1,881, based on NeighborhoodScout’s exclusive analysis. Rents here are currently lower in price than 77.6% of California neighborhoods. Nestor is a residential neighborhood in the southern section of San Diego, and part of the Otay Mesa-Nestor community planning area. According to Zillow, Nestor’s home values have gone up 29.4% over the past year.

It neighbors Palm City and Otay Mesa West to the east, Egger Highlands to the north, San Ysidro to the southeast, and the Tijuana River Valley to the south. Major thoroughfares include Coronado Avenue, Saturn Boulevard, Hollister Street, and Tocayo Avenue. According to Areavibes.com, the cost of living in Nestor is 19% lower than the San Diego average and 13% higher than the national average. On their livability index, it ranks better than 42% of areas in San Diego.

The Otay Mesa-Nestor community planning area is located in the southern region of the City and is bounded on the north by Chula Vista, on the east by the community of Otay Mesa, on the south by the Tijuana River Valley and the San Ysidro community, and on the west by Imperial Beach. Twenty percent of the planning area consists of schools, parks, transit, and other public facilities, while vacant, undeveloped, agricultural, and mineral extraction and processing uses comprise the remaining 15 percent.

Emerald Hills is a fairly good neighborhood in San Diego to invest in real estate. It is a calm neighborhood with many green spaces nearby for residents to visit. Most areas in this neighborhood are quiet, as noise from the streets and other parts of the city is rarely an issue. It is bordered by Oak Park and California State Route 94 on the north, Chollas View and Euclid Avenue on the west, Encanto on the east, and Valencia Park and Market Street on the south. Major thoroughfares include Kelton Road and Roswell Street.

Most houses for sale in this neighborhood are located in places that are not very suitable for walking since carrying out daily needs is sometimes difficult. The typical home value in Emerald Hills is $659,983, up 33.0% over the past year.

Another urban area that is great for investment is the Downtown/City Center. It is one of the best places to live in California. It offers residents a dense urban feel and more than 70% of the residents rent their homes. So it is a great neighborhood to buy rental properties due to high demand. Downtown’s public schools are above average. It offers good nightlife with restaurants, bars, and entertainment venues. Niche.com ranks it #25 among the best neighborhoods to live in San Diego.

Highest Growing San Diego Neighborhoods Since 2000 (List by Neighborhoodscout.com)

  1. Mountain View Southeast
  2. Logan Heights West
  3. Logan Heights
  4. Barrio Logan
  5. Golden Hill South
  6. Grant Hill West
  7. East Village
  8. Sherman Heights
  9. Mountain View East
  10. Barrio Logan East

The cheapest or most affordable neighborhoods to rent in San Diego are Alta Vista, where the average rent goes for $1100/month, Broadway Heights, where renters pay $1100/mo on average, and Emerald Hills, where the average rent goes for $1100/mo, Encanto, where renters pay $1100/mo on average $1,383, Jamacha Lomita with an average rent of $1100, and Skyline, where the average rent price is 1100. In all of these areas, the asking prices are below the average San Diego rent.

San Diego Rental Market
Graph Credits: RentCafe.com

Apart from San Deigo, you can also invest in several other real estate markets in California. California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. Apart from the San Diego real estate market, you can also invest in another hot market in San Jose. San Jose is part of Silicon Valley, a place where $100,000 a year or higher salaries from competing tech firms have driven up the cost of real estate.

But what about the San Jose housing market itself? San Jose is the third-largest city in California, home to roughly a million people. It has the highest cost of living in any area in the U.S., and it is one of the most expensive housing markets in the country. If you want to invest in San Jose real estate, you may not need to buy and renovate. Instead, if you know of industrial or commercial properties near major employers they may need to convert to employee housing, which you could buy now and hold until it sells.

If that doesn’t happen, you could still turn it into a co-working space. In January 2018, Redfin ranked the ten hottest neighborhoods in the United States. Nine of the ten were in San Jose. When single home prices fall from 1.2 million to 1 million, homes now sit on the market for several days instead of being snapped up immediately.

The other good place for real estate investment in California is Sacramento. Sacramento is an island of sanity in an overpriced, over-regulated, and overheated West Coast housing market. It reflects the California ideal that most of the state has lost, and that’s we recommend it to investors over the “hotter” California metro areas. These are the same factors causing many Californians themselves to vote with their feet and move here instead of moving out of the state altogether.

If you’re considering Sacramento real estate investment, the diverse rental market is a definite plus. Being a state capital, it is home to several universities. This allows you to rent to the relatively large student market in addition to the local population. There is, of course, the University of California campus in Sacramento, but you could own investment properties by American River College and other, smaller schools in the area, too.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment properties.

Not just limited to San Diego or California but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience with our team to see if San Diego makes sense as a place to invest today.

We can help build you a custom portfolio of turnkey properties located in some of the best markets in the United States. By researching and structuring complete turnkey real estate investments, we can help you succeed by minimizing risk and maximizing profitability.

Real Estate vs. Real Property: What’s the Difference?

Real Estate vs. Real Property: An Overview

Real estate and real property certainly sound very similar, and the two concepts have a lot to do with each other, but there are subtle differences between them. Understanding those differences can help you understand the nuances of the land you own and how you own it. While real estate often refers to land, the term real property takes things a little further and examines the rights related to that land.

KEY TAKEAWAYS

  • Real estate is a term that refers to the physical land, structures, and resources attached to it.
  • Real property includes the physical property of the real estate, but it expands its definition to include a bundle of ownership and usage rights.
  • The distinction is most useful in the real estate world, where different ideas might apply to owners versus renters or leasers.
  • To most of the general public, the idea of real estate encompasses real property, but from a legal perspective, the distinction is important.
  • The real property consists of both physical objects and common law rights; real estate only consists of physical objects.

Real Estate

Real estate is simply a piece of land plus any natural or artificial—man-made—improvements that are attached or have been added. Natural attachments are part of the land and include trees, water, valuable mineral deposits, and oil. Artificial improvements include buildings, sidewalks, and fences. Real estate can be split into two broad categories—residential and commercial.

Residential real estate is property intended for human habitation by a single-family or multiple families. Real estate may be leased or owner-occupied, but the term residential real estate most often refers to property that is leased.

Commercial real estate has a business use and focus. This property type includes office buildings, malls, restaurants, and other such activities. Commercial real estate may be owner-occupied or leased.

Industrial real estate is a subdivision of commercial real estate and includes property where manufacturing, warehousing, production, and assembly take place.

Real Property

Real property is a less commonly used term and as such, is a less commonly understood concept. Real property is a broader term and includes the land itself and any buildings and other improvements attached to the land. It also encompasses the rights of use and enjoyment of certain land, as well as any of its improvements.

Renters and leaseholders may have the right to inhabit land or buildings—a real property consideration—but those things are not considered real estate.

Real property includes real estate, and it adds a bundle of rights. This bundle of rights is a broad term used to organize property rights—as they relate to real estate. In a nutshell, it grants property owners the ability to use their property as they see fit.1

A bundle of rights encompasses five different rights of the property owner:

  1. The right to possess is the right to occupy the property.
  2. The right to control is the right to determine interests and uses for others.
  3. The right to enjoy is the right to use the property without outside interference.
  4. The right to exclude is the right to refuse others’ interests or uses for the property.
  5. The right to dispose of is the right to determine how and if the property is sold or given to another party.1

There are some other complex exceptions and restrictions to these rights and legal treatments.

Key Differences

In general, the difference between real estate and real property boils down to the inclusion of the bundle of rights. The real property consists of both physical objects and common law rights whereas real estate consists only of physical objects.

13 Pros and Cons of Living in San Diego, CA

Pros of living in San Diego

1. For the ants in your pants

Are you a person of action? If you answer yes, you will be more than happy once you make San Diego your base. For the couch potatoes out there, be prepared to go out more since everything in SD is beyond charming!

What is waiting for you:

  • Los Angeles, Las Vegas, beaches from your dreams as well as mountains, all these places are waiting for you nearby San Diego. You can wake up, go to the beach, and then if you crave the party of your life, you can sit in the car and go to Las Vegas! Disneyland is only about an hour and a half away, and for a weekend picnic, you have Catalina Island, an hour’s ferry ride away!
  • Never-ending list of activities! We are sorry to inform you, but you will be feeling pressure to start doing sports! San Diego is the ultimate surfing and skateboarding city and all the other adrenaline-rush and outdoor activities! You will pick your own, or more than one, and the list is long. Snorkeling before work? How about golfing on the weekend on one of the 80 golf courses? The choice is yours!
  • For all the nature lovers out there (and we all are, right?) San Diego has prepared all the magical places. Seventy miles of coastline with some of the best beaches in the world are perfect for spending a relaxing weekend. Two hundred hills to hike and explore, snowy mountains a couple of hours away, as well an enormous number of green parks and botanical gardens are making San Diego a peaceful place to call home.
San Diego Beach
Beach and Palm Trees in San Diego

Did you know that the biggest park in the United States is in San Diego? It is Balboa Park, a 1,200-acre space with 17 museums, many gardens, and theatres! It is the most popular place for romantic dates and first kisses!

2. Christmas underneath the palm trees

California dreaming days are over since sunny coastal city will become your reality!

The weather in San Diego is one of its top amenities. It is mild all year round, allowing you to go out, hike and enjoy the outdoors! Beach time is guaranteed most of the year, even though sometimes the Ocean can be freezing. An average of 266 sunny days a year promises you to have your vitamin D dose every day and be fulfilled and joyous!

If you are a fan of the wintertime magic, be prepared to celebrate Christmas underneath the palm trees. We promise that it has its charms too!

3. Fine wine and dining

Finger licking good is a minimal thing to say about San Diego’s food. Not only are the restaurants top-notch, but the fruits and veggies are the best in the U.S.! San Diego has the biggest number of farms in the whole U.S., producing the most considerable number of avocados as well! This guarantees some of the best guacamole of your life, and Farmer’s Markets is waiting for you!

San Diego Sunday Street Market
Sunday Street Market in San Diego. artisan market in Gaslamp Centrally Located in the Historic Gaslamp Quarter

For the restaurant nights, you will have a big pallet of international cuisines to pick from. Great ramen, extraordinary sushi, and of course, fantastic Mexican food. Burritos are a staple in SD; you can try out all the versions!

For the wines and drinks, you are once again lucky! San Diego has more than 150 local breweries, and it is known as one of the best beer cities in the world!

Fun fact: The original Margarita cocktail was created in San Diego!

4. Dreamlike diversity

Just like the food in San Diego, people are diverse as well! You will meet different cultures and try some of the best traditional foods ever. 28% of the population is Hispanic, making San Diego bilingual, everyone speaks Spanish! Except for Hispanics, SD has a big Filipino community as well.

5. Birthplace of skateboarding

In the 1960s in San Diego, surfers found a way to surf when the waves were flat- and they named it skateboarding! SD is actually the first place where a professional skateboarding competition was held!

Skateboarder
Man skateboarding in the park with palm trees and city on background. San Diego, California

The birthplace of Olympian Shaun White and the city where Tony Hawk spent most of his life is for sure a skateboarding heaven!

San Diego named the official Tony Hawk’s day to be the 29th of May! That is how big the love for skateboarding is here!

Similarly to that, there is a surfing obsession as well. The first surfing store opened in San Diego in 1952. and many famous beaches for surfing are located in San Diego.

Your relocation will be perfect for you to try out both of these great activities!

6. Anti-stress!

Imagine if your workdays could feel like vacation days. Sounds unreal? Well, move to San Diego, and you will experience it on your skin! The laid-back culture of the locals is infecting, and you will soon forget what the real stress actually is. Maybe it’s the beach, maybe it’s the air, but who are we to try to understand? You will experience it once you become a fellow citizen of this fantastic city!

San Diego Boardwalk
The concrete boardwalk at Mission Beach, which is used by both pedestrians and bikers.

Fun fact: The median age in San Diego is 34.5, so many millennials will be surrounding you!

7. We say yes to the public schools in SD!

You don’t have a reason to worry if you plan to put your kids in school once you move. San Diego can actually brag about all the good schools it’s providing! Contrary to popular belief, public schools are actually good in SD! University City High School and La Jolla High School can easily compete with many U.S. schools. Interestingly, they are known for outstanding athletics programs, which help get into college!

8. Charming little neighborhoods

Okay, you understand by now that we love San Diego. What about its neighborhoods? Here are our top 3 areas to check out once you search for a house or apartment.

Pacific Beach San Diego
Panorama of San Diego’s Ocean Beach from the pier
  • Little Italy
    Excellent for families and young people who enjoy all day round activities. This pedestrian-friendly area is magical to live in. You will have a farmer’s market on your doorstep and many charming restaurants and shops to visit on your walks. The average rent for a one-bedroom apartment is $3000, more than the city’s average.
  • Pacific Beach
    This one is always the starting point for newcomers. Since you will be one, know it is cheaper than the Downtown but still as lively as possible. Amazing Ocean view and young people’s hotspots are vividly energetic and fun!
    P.S. Watch out for the parties since it can get loud!
  • La Jolla
    This one Is fancy! Away from the busy Downtown and with its own rules, La Jolla can be the vacation spot of your dreams, or if you are lucky and have $3,200 for rent a month, it can be your everyday! With beaches, kayaking, hiking locations, and excellent little restaurants, La Jolla has everything you need and more!
San Diego Little Italy
City life in Little Italy on a sunny day

Cons of living in San Diego

1. The expensive roof over your head

It is not a secret that California is very expensive! Since San Diego occupies one of the best locations in California, it is no wonder the housing prices are over the moon! Everyone wants to live here. More than 50% of units are for rent!

A typical home value in SD is $830,900. An average one-bedroom apartment’s monthly rent is around $2,500.

San Diego Neighborhood
Black Mountain, San Diego, suburban street with large villas next to each other

2. High state income tax

You may earn a lot in California, but you will give a lot on tax. California is actually a state with the highest tax, up to 13%. This is a hard one if you haven’t lived in Cali until now. Think about your finances once you have this number in mind.

It is worth it for someone, but sunny weather and a lifestyle to dream of are not everything you need to think about when moving.

3. Your car will be your best friend

San Diego is a car-centric city, and you should know that driving is almost a must! If you have a car, of course. You will be your own boss without depending on public transportation.

Another problem besides poorly organized public transportation is the need for parking spaces! Not only the lack of but the expensive parking tickets and parking spots. You will need extra savings to cover gas and parking.

4. Nightmare traffic

Like any other big city with a population this big (1.4 million people), this SoCal city has its virtues too. Since a city is car-dependable and almost everyone drives a car (do the mathematics), you can only imagine how bad the traffic is! Spending time stuck in it is time-consuming, and you better prepare a snack and a bottle of water for the times you will be stuck in it.

San Diego Traffic
Emergency in San Diego 911 a car on a busy interstate highway. During rush hour, a paramedic car is stuck in traffic on the highway.

An average driver spends 32 hours stuck in traffic a year in SD!

5. The obvious for the last

San Diego IS HELL OF EXPENSIVE. Yes, it needed to have upper letters. If you are charmed by this coastal city, be prepared to make savings before the actual move happens.

San Diego constantly ranks in the country’s top 10 most expensive cities! Everything is more expensive here: gas prices, taxes we’ve discussed, groceries, and restaurant prices.

10 Questions to Ask When Buying New Home Construction

My husband and I recently signed a contract on a new construction home. While it’s been exciting getting to this point (and will be even more exciting once permits are in and the actual building can commence), it’s also been quite the learning experience.

Buying new construction is a different process than buying your typical pre-built home. What’s included, what’s not, and what’s hidden in that massive contract depends on the builder that you use. As with any situation where you’re moving or about to spend a lot of hard earned money, it’s important to go in prepared – and that means asking the right questions.

The first interaction you’ll have with the builder – and in fact, the first several, at least – will be with the builder’s sales representative. These early meetings are your chance to ask all of the questions you might have regarding costs, labor, and other essentials that you need to know about before jumping in. Write your questions down before you go in so that you can be sure not to forget anything important, and don’t be shy about getting the answers that you need. This is a major purchase, and you don’t want any surprises later.

Not sure exactly what you need to be asking about? These 10 questions to ask when buying a new construction home will help get you started.

  1. Is the lot cost included?When you’re exploring new construction options, you’ll see that each plan comes with a base cost. This is the cost of the structure itself, as well as base interior and exterior features (we’ll get into those in a little bit). What may not be included is the cost of the land, so be sure to ask if the lot cost is figured into the base.If the lot cost is included, ask if there are premium costs for certain lots. It’s possible that the base cost does include the lot, but the remaining lots in the development all have added costs for certain features that you can’t opt out of, such as look-out windows in the basement or wider yards. If the lot cost is not included, ask what it is (and whether there are additional premium costs) and factor those into the base price for the house.
  2. How long will building take?It’s important to know what you’re getting into timing-wise with a new construction build, particularly if you have a house to sell first or you’re going to be renting. While the building process is prone to delays and you won’t be able to get a finite schedule for how long the build will take, you’ll be able to get a general idea of what you can expect. Be sure to also ask if the build time includes the time it takes to get the permits, since those will typically take about 30-45 days to obtain.
  3. What warranties are provided with the house?Just because a home is brand new doesn’t mean that no problems will arise. Fortunately, most new construction homes come with one or more warranties that protect you in the event of a mishap early on, including a short term whole-house warranty and a longer structural warranty. Ask what the warranties include and how long they last. While you can always buy your own home warranty, you should expect that the builder will cover you in some way for at least the first several years.
  4. What are the standard finishes?Does a base cost look too good to be true? That might be because the builder is expecting you to spend big when it comes to finishes like flooring and countertops. Ask what types of finishes are included, and better yet, go through the model unit with the sales representative and have them point out what’s standard and what is an upgrade. You likely won’t meet with the design center until after you’ve gone under contract, so it’s important to figure out early what sorts of finishes and appliances you can expect to be included in the home’s base price.
  5. Are you allowed to purchase your own appliances or materials?Had your heart set on butcher block countertops but the builder doesn’t offer them? It’s possible that you may be able to purchase them yourself and then have the builder install them. Alternately, some builders won’t let you purchase your own materials, but they will let you bring in your own appliances, even on items that are included in the sale, like sinks and toilets. Keep in mind that, in terms of appliances, you probably will have to make some purchases on your own, such as washers, dryers, and refrigerators.
  6. If you can bring in your own materials or appliances, will you get credits?Let’s say the base price of your new construction home includes a kitchen sink worth $200, but you’d like to upgrade and purchase a sink on your own that costs $400. Will you get $200 off the purchase price for not using the sink that’s included in the base? Some builders offer credits for any upgrades or self-purchased materials or appliances, while with others you’ll just have to eat the cost of the originally included item. Credits are a nice touch, but they’re not usually standard, so it’s best not to go in expecting that you’ll get money off the base cost for purchases like these. In general, builders don’t like to lower the base cost, but if they do offer credits, that’s a win for you.
  7. Is landscaping included?Depending on the size of your yard, landscaping, including sodding and putting in trees and plants, can set you back several thousand dollars or more. Is that a cost you’ll have to factor in on top of the home purchase? Some builders include your basic yard work, while others leave you with unfinished land that becomes your responsibility to landscape (and generally must be completed in a set amount of time, per the contract). Ask whether landscaping is included, and if so, what that entails and if there is any sort of warranty on the materials so that if your newly sodded grass dies right away or some other mishap occurs you’re not responsible for fixing it.
  8. Does the contract include a cost escalation clause?New builds are notorious for last minute surprises, but you don’t want to be on the hook financially if it happens. A cost escalation clause allows the builder to charge you for any unanticipated costs that arise as a result of necessary labor or materials. So if lumber prices go up before the builder has purchased the materials for your flooring, or an unexpected delay adds a few weeks onto the build, you’re on the line for those costs. If you’d rather not deal with the stress of unanticipated costs, find a builder that doesn’t include a cost escalation clause in the contract.
  9. Are there any homeowners rules or regulations?Even if there is no homeowners association for the development, the builder may still set some guidelines as far as what’s allowed and what’s not on your property. For example, you may not be able to use a particular type of fencing or install a shed in your backyard. It’s better to ask this question early and know what to expect than to move in and find out that you can’t bring into fruition certain plans you had for the space.
  10. Are there any financial incentives for using the builder’s preferred lender?Some builders offer discounts on closing costs if you obtain your mortgage through a company that they have a relationship with. Ask if these sorts of financial incentives are offered, but don’t make your final decision about where to get your mortgage based on the discounts alone – you may still be able to find a better deal through other lenders. It’s still good to know however if there are benefits to working with the builder’s preferred mortgage company.

If it’s your dream to build a new construction house, go in to the process with an open mind and a clear idea of what you can expect. The more questions you can ask in the beginning, the less surprises you’ll potentially face in the future.

And as with any home purchase, be sure to have an attorney read over your contract so that you can be sure everything is fair and equitable. Some buyers of new construction prefer to go in to sales meetings with a real estate agent as well, though in my own experience, I didn’t find that to be necessary. Be smart, ask the right questions, and at the end of the day (or fine, year) you’ll end up with a beautiful home built just for you.

4 QUESTIONS YOU SHOULD ASK THE SELLER BEFORE BUYING THAT SOUTH BAY HOME

Buying a house is probably the single most expensive and smartest investment you can make. But as you may well be aware, it can also be scary. “Caveat emptor,” or the age-old principle of “buyer beware,” puts the responsibility on the buyer to know the quality and the risks that may be associated with a product before purchasing it.

To avoid regrets and maximize the enjoyment you get out of your purchase, here are four questions you should definitely ask the seller before buying that house:

  1. How much did you pay for the house?One of the first things you should know right away is the past and present value of the house for sale. Thus, you need to know how much the previous owners paid for the house compared to their current asking price. It’s also important to know how long the house has been on the market. These pieces of information can give you leverage for negotiation. You should also find out how the seller arrived at the current property price and do your due diligence to see if their numbers match the property’s fair market value.
  2. What is the house’s overall condition?No matter how beautiful and spotless a house appears to be, potential buyers should never fail to inquire about the foundation and maintenance of the house.Key questions should include the following:
    • What was the routine maintenance of the home?When was the roof or the house’s ventilation system last cleaned or repaired?Has the home undergone major renovations?How old are the appliances, if they’re part of the purchase?
    You should also take a keen interest on the structure itself – make sure that the plumbing is intact and that the electrical system meets safety standards. Negligence can send you into an excruciating money pit, not to mention put your personal safety at risk, so it’s important that you know every little detail about the house’s overall condition.
  3. How is the neighborhood like?As a buyer, you want to make sure that your quality of life is maximized upon moving in. Even the most sophisticated of homes will induce buyer’s remorse if it’s located in a bad neighborhood.Any inquiries about the following should be fair game:
    • The community
    • The present crime rate
    • The police department
    • The school system if you are moving in with kids
    Buyers should know all kinds of nuisances and problems that occur or might occur in the neighborhood. Find out if a noisy neighborhood or transportation system may have something to do with a seller’s decision to put their house on the market. The same factors can affect not only your enjoyment of your purchase, but also the value of the property should you decide to sell it in the future.
  4. What are the pros and cons of living in the house that I should know about? Asking this question presents a real opportunity for you to find out what the seller considers the property’s best features and what they think is its downside. From there, you can start to think about whether or not you want to proceed with the purchase.

5 Important Questions to Ask Before Buying Real Estate

Real estate transactions are full of assumptions. A lot of our clients have been scammed of their hard-earned money due to the fact that they do not ask the right questions before purchasing a property.

One of our clients came complaining to us about the house he purchased few years ago, only to discover the land on which the house was built on was in dispute and till today he’s still trying to get his money back. How Sad!!

Do you know you can avoid the issues that come with real estate if you can just ask the right questions and do a little research yourself?

Some of the questions to ask your realtor before buying a property include:

What Documents does the Property Have?

Some of the documents/title you see in real estate includes Certificate of Occupancy, Deed of Assignment, and Excision Title etc. You need to find out which title your property has before making a purchase

Do I Get an Inspection Done Before Signing the Contract Sale?

It is advisable to go and inspect a property before buying it just like you would do for a car. You can easily walk away from the deal if you find any problems with your property.

Are there any deed restrictions on the property?

Deed restriction is simply how you use or what you do on your property. These restrictions often go beyond the local zoning laws in controlling the use of your property. For example, you might want to put a kiosk in front of your property or you may want to convert your living room upstairs to a bedroom, you need to be sure what you want is allowed as this may affect your decision to buy the property.

Are they any Hidden Charges?

Usually in real estate, asides the normal cost of the property, there are other charges like VAT, Legal fees and Utility bills.

I have seen cases where a client has refused to pay utility fees with the excuse that the realtor didn’t let him know it was included in the transaction. Such a scenario can be avoided if only you ask

What is the Mode of Payment?

Payment plans differ so you need to find out the payment plan that tailors to your need.

6 tips to help you find the right agent

During our lives we buy and sell a lot of things, but there are very few things we buy and sell that are worth more than a property.

Whether you are selling your lifetime home or an investment property, finding and choosing a real estate agent is a big decision.

As a property stylist and property developer, I often have clients seeking my opinion as to who I recommend they work with. As a result, part of my role has become working with clients on their selection process and helping them to make an informed decision.

Here are 6 tips to help choose the right agent for you.

1. Research

Research potential agents just like you would similar properties and your potential buyers. There are many different real estate agencies to choose from. Look at a few to get an insight into how they work.

2. Look local

The agent you choose is going to represent you and your property. It’s important that the agent  you choose knows the area you’re selling in, and knows the other properties for sale, and that have sold recently.

Other properties in the area could be competition to your sale, and it’s good to know what you’re up against.

An agent who knows the local scene can assess your home as it sits in the market, alongside similar properties.

3. Get out & about

One of the best ways to research your shortlisted agents is at open house inspections, so why not pop into one and see your agent in action.

You don’t have to choose open homes of properties that are similar to yours, just use the opportunity to see how your agent presents an open house and deals with potential buyers. It can also be a good time to say hello and get some contact details.

At the inspection watch and interact with the agent, taking note of the following things:

  • The way the agent communicates and interacts with potential buyers. Is their communication style one that you’re comfortable with?
  • Their behavior at the open house inspection. Did they stand at the door and welcome everyone? Did they proactively identify the features of the property for sale? Were they able to answer all your questions about the property?
  • Did they follow up with you after your attendance at the open house inspection to see if you wanted more information about the property?  Is this something you want your agent to do?
  • Were they on time to the open home and other appointments?
  • What do you think of the marketing/advertising for the properties the agent has listed?

4. Comfort matters

Do you feel comfortable with the agent? You need to be very honest with an agent during the selling process and hence you need to make sure you are comfortable with the agent and can have open and honest communications.

5. Check the results

Look at the agent’s results, making sure you look at properties the agent has sold recently. Ask for the hard facts, sale prices, time on market etc.

Take a look at what’s sold in your area in the past six months and who’s been managing the property.

6. Market knowledge

The agent should be able to give you a thorough snapshot of the market in your area and surrounding areas. They should know about schools, transport, demographics and the sorts of buyers looking for homes in the area.

These are just a few of the top tips and the initial things you need to consider when selecting an agent – so happy selling and buying.

How to Choose a Real Estate Broker

As a new real estate licensee, the first step you’ll need to do is choose a real estate broker. The process of picking a broker can start early, as some states require that you be sponsored by a broker when you take your real estate exam. Don’t let the process of finding a real estate broker to work for intimidate you. We’ve put together some information to help you learn how to choose a real estate broker that’s right for you.

How do you select the best brokerage for your new career? Review the following five steps to learn how to choose a real estate broker.

Step 1: Ask about the commission split

Most real estate agents get paid on commission. When you’re not selling, you’re not getting paid. But when you’re selling, you’re going to split the proceeds with your broker. Brokers offer different commission structures. (And some brokers offer salaried positions, but these are few and far between.) While factors like company culture, resources, market share, reputation, and support will also come into play, you’ll want to pick a brokerage that offers you a commission split you can live with—keeping in mind that commission splits often get better with experience and sales volume.

Here’s how commission splits work: Let’s say you sell a $300,000 home and the average commission in your area is 6%. That 6% is first split between the buying and selling agent. Now you’re down to 3%, which works out to be $9,000. Next, you’re going to have to share that with your broker. If you’re on a 60/40 commission split, you’re taking home 60% of that $9,000, or $5,400. Of course, this is before expenses and taxes.

What’s a good commission split? That depends on the business, your market, the broker’s support and resources, and a number of other factors. Just make sure you understand the split and how you might get a bigger percentage over time.

Keep in mind that some brokerages these days are offering real estate agents a salary and benefits, or a hybrid model, so you might want to shop around if this approach to compensation appeals to you.

Step 2: Evaluate the brokerage culture

Before you choose a real estate broker, ask yourself: What kind of company do I want to work for? How much support do I want from my coworkers? Just like other businesses, real estate brokerages develop a company culture that informs the way they do business. Are you looking for a small, mom-and-pop brokerage with an intimate, family-like brokerage culture? Or would you prefer a big-box franchise brokerage that’s more likely to let you fend for yourself? Are you looking for weekly get-togethers and company caravans on open house day? The best ways to know and understand a company’s culture are to chat with agents who work there or attend a company function.

Step 3: Decide between a franchise or independent brokerage

When it’s time to choose a real estate broker, another big question to consider is whether you prefer to work for a franchise or independent brokerage. Big-name brokerage houses like RE/MAX or Keller Williams have offices all over the country. A mom-and-pop brokerage might have been serving a single community for generations. Franchises tend to exert more control over their agents than an independent firm, but they usually offer more support and training. Independent firms are usually locally based and consist of a small- to mid-size team. The benefit of working for an independent broker is that you have more freedom to conduct your business the way you want to.

The National Association of REALTORS® reports that the majority of REALTORS® (53%) choose to work for independent firms. If you relish your independence and dislike corporate culture, an independent brokerage may be the way to go. The main advantages of a franchise are the many resources they offer in terms of information and marketing support—and the name recognition.

Step 4: Learn its reputation and niche

When you start your research, begin with a simple Google search as if you were a buyer. Search for “homes for sale in [community name]” and see who comes up. You want the brokerage you select to have a strong market presence and a quality reputation. If they have a high market share, you can depend on them to help you find leads. And we all know how important a brokerage’s reputation is.

Just as important is the niche your brokerage is in. Studies show that the right brokerage can triple your income. The right niche for you will probably be a combination of your interests, lifestyle and the opportunities available in your area.

Step 5: Make sure it will offer support

Some brokerages are very hands-on and offer extensive mentoring, free training, and marketing collateral. Other brokerages are just places to hang your hat while you get to work growing your own business. You might take the occasional sales training class or meet for a monthly brokerage meeting, but otherwise, you’re on your own. You’ll find many variations between the two extremes, and it’s largely a matter of finding the corporate culture that you prefer.

When you’re ready to choose a real estate broker, keep these considerations in mind. Finding the right brokerage involves research and interviewing. Don’t be afraid to sit down with several real estate brokerages in your area to see who fits the best with your learning style and business goals.

Why it’s necessary to choose a real estate broker

Why is broker selection so important? In your first year as a real estate agent, you’ll have a ton of questions, uncertainties, and getting-your-feet-wet experiences. You’ll need to choose a real estate broker that will be there with you each step of the way.

When you’re first starting out, you won’t have the funds to compete with the big real estate brokerages when it comes to marketing, lead generation, and conversion. You’ll need a broker’s help getting your name out there, and you’ll want to use the broker’s tools and systems to kick start your career.

The Top 5 Reasons to Hire a Real Estate Agent

Buyers and sellers are on separate sides of the fence when it comes to home sales. What one is trying to achieve is often diametrically opposed to what the other wants to see happen—the first usually want to steal the property while the other wants top dollar. And yet, they share the same ultimate goal. They want a sale.

Both sides can benefit significantly from hiring a real estate agent to assist them, but their reasons can be different.

It’s All About the Money…

 Consider this if you’re contemplating going “FSBO”—for sale by owner—when listing your home. Of course, you want to get as much for their home as possible, and you might think that means not parting with extra commissions. But a 2017 study indicated that FSBOs fetched about 30% less for their owners than agent-listed properties. 

And you’re probably going to have to pay a commission anyway if your buyer is represented by an agent. The buyer’s agent’s commission is typically factored into the deal—although you’ll still save on the commission you would otherwise have paid your own agent.  

And why not use an agent if you’re the buyer? After all, the seller is paying the commission, not you. Of course, there’s always a slim possibility that the seller will refuse to do so, but you can probably move on and look at other properties if it appears that this will be the case, although it can depend on whether you’re shopping in a buyers’ or sellers’ market and who has the upper hand. 

…And Attention to Detail

You might be far out of your element when it comes to reviewing and understanding the multiple documents involved in a real estate deal, and you should have a thorough understanding of what you’re getting into regardless of whether you’re buying or selling. Purchase agreements alone can top 10 pages, not to mention federal, state, and local document requirements. 

Luckily, your agent will be far more familiar with all this paperwork than you are. Consider this if you’re still thinking about saving money: Some mistakes or omissions in these documents can cost you as much as that commission you were trying to avoid paying—or even far more. 

Here’s an example: Maybe a buyer makes an offer on a home, but it’s contingent on getting a mortgage. There’s no possibility that the buyer could purchase the property without first securing financing—but there’s no such contingency or escape hatch built into the purchase agreement to let the buyer out of the deal if financing fails. The buyer is obligated to go through with the sale or be sued if it turns out that a mortgage isn’t happening. 

Consider hiring a broker for a smaller one-time fee to simply review your contracts before signing if you’re still dead set against hiring an agent to take care of all this. 

Privacy, Confidentiality and Fiduciary Duty

Your real estate agent has your back whether you’re a buyer or a seller. Agents have what’s known as a “fiduciary” responsibility to their clients. They are legally obligated to put their clients’ best interests first. 

This duty imparts a very high standard for confidentiality. As a buyer, do you really, really want to turn over your most intimate financial details to a FSBO seller who’s under no legal obligation to keep the information confidential? The same goes for turning any and all information over to the seller’s agent, who has no fiduciary responsibility to you but only to the seller. Your own agent would know whether any information the other agent is requesting from you is reasonable. 

You do have recourse if you’re the buyer and the seller’s agent has lied to you, misled you, or disclosed confidential information. You can report it to the agent’s professional association, such as the National Association of Realtors. But again, this assumes that the seller has an agent. You’ll have far fewer options if the property is FSBO. 

Agents Know What to Look For

Buyers usually have a pretty firm idea in mind of what they want in a property, from number of bedrooms to an attached garage to any number of other must-have and must-not-have factors. You’ll probably feel pretty comfortable looking at homes with that list tucked firmly in the back of your mind.

But your agent will be alert for issues that might not cross your mind, such as furnace issues, leaks, roofing problems, and mold and insect issues. An agent will recognize the telltale signs of these problems and know how best to approach them. Again, this experience and knowledge can end up saving you thousands down the road. 

You know exactly how much you want for your home if you’re the seller, but is the price you’ve arrived at reasonable? You might only know for sure if you’re able to identify comparable sales that confirm that you’re in the right range—or not. Agents can do comparative market analyses in their sleep. 

An agent can hand over researched, current, and reputable data regarding a neighborhood’s demographics, crime rates, schools, and other important factors. That’s a lot of time-consuming research to do on your own, particularly if you don’t know where to start. 

Agents Have Superior Negotiating Skills

You might not be a negotiation shark if you don’t happen to be an attorney, mediator, union rep…or a real estate agent. Remember that fiduciary responsibility your agent has to you. It’s your agent’s job to get you the best possible price for your home, or to see to it that you get the best possible deal on the property you want to buy. 

Agents are trained to negotiate well, if only from experience. They know what normally works and what does not. Most have tried-and-true techniques all their own. And, most importantly, they have no emotional stake in the outcome that can cloud their thinking. 

You, on the other hand, might be willing to come up with $10,000 more to purchase that to-die-for home, never realizing that it’s really not necessary because you possess certain bargaining chips. It’s just more money saved if you have an agent who prevents you from taking an unnecessary financial plunge. 

The Bottom Line

Henry Ford once said that it proves that you’re smarter than they are when you hire people who are smarter than you. The trick is to recognize when you need help and to find the right person.

Frequently Asked Questions (FAQs)

How much does it cost to hire a real estate agent?

You’ll typically pay between 5% and 6% of the price you sell your house for, which will be split between your agent and the seller’s agent.1

How can I find a real estate agent?

Word of mouth can be a great way to find an agent. Ask friends, family, and coworkers whom they would suggest. You can also contact reputable real estate offices in your town and ask which of their agents have experience selling in your neighborhood. Once you narrow it down, interview your top real estate agent choices, and ask them to prepare a listing presentation to show you how they would market and sell your home.

What’s the difference between a real estate agent and a Realtor?

A real estate agent is licensed to sell real estate, and so is a Realtor. A Realtor is a member of the National Association of Realtors. Members of NAR must adhere to a code of ethics and take ongoing education to keep their designation as a Realtor.

10 BENEFITS OF HIRING A REAL ESTATE AGENT

If you’re getting ready to buy or sell a house, you might be weighing the pros and cons of hiring a real estate agent. Some people will avoid working with agents or realtors because they think real estate agent fees are too high. Others wouldn’t hire one because they’ve had bad experiences in the past. However, this only emphasizes the importance of having a good agent to work with. In addition, if the only reason you’re not working with an agent is to save money by not paying fees and commissions, then you’re overlooking the main benefits of hiring a real estate agent. What does a real estate agent do and how do they make your transaction easier? Here are the top 10 reasons why you need a real estate agent whether you’re a seller, buyers, or a property investor.

#1 Agents Know What to Look For

Those in the market to buy a house or an investment property usually have a firm idea of what they want, from the number of bedrooms and bathrooms to a swimming pool and other must-haves. You’ll probably feel comfortable looking at homes for sale with that list tucked firmly in the back of your mind. However, there will always be properties in the area you wish to live in. So the question is, which one of these homes will suit your specific needs and budget?

If you’re buying a home without a realtor, then you’ll have to sift through all the available options yourself. Anyone can imagine how time-consuming this task is. An experienced real estate agent, however, will shortlist properties for you based on your wish list. Realtors typically know every house on the real estate market and it’s their job to find the one that fits your needs and budget. The agent will also guide you through the buying process, making it smooth and stress-free.

#2 Agents Have Extensive Market Knowledge

No one understands current real estate market trends and conditions better than agents. If you’re a property investor, this is one of the main reasons and benefits of hiring a real estate agent. Top agents are well-versed with all aspects of the housing market, especially how different factors like mortgage interest rates and the unemployment rate can affect it. They also have intimate knowledge of street-by-street and even house-by-house market, for both buyers’ and sellers’ markets. Thus, they know the ins and outs of the market and know more details of homes for sale than the info found on the MLS.

The type of real estate data they possess includes the median and average sales prices, ratios of list-to-sold prices, and average price per square foot of similar properties. They can also identify real estate comparable and hand this information to you, so you can make an informed decision quickly. Other market knowledge that only a local agent will know include which neighborhoods are near great schools, which neighborhoods saw the greatest increase in market value over the years, and what are the most promising projects in a given area. All of this allows agents to help you determine whether or not a certain neighborhood is good for real estate investing.

#3 Agents Have Professional Networks

Real estate agents are professionals at networking. They know just about everyone involved in the process of buying and selling a house. Many will have a list of preferred providers who they have worked with in the past and who they trust. This is one of the benefits of hiring a real estate agents that both buyers and sellers will find very helpful. For example, if you’re selling a house, a seller’s agent will give you a list of contractors, home repair professionals, staging companies, title companies, landscapers, plumbers, painters, etc.

Buyers also need to work with professionals including inspectors, appraisers, real estate lawyers, and mortgage professionals. Instead of researching these people individually and reaching out to them on your own, you can tap into your buyer’s agent’s network. This is especially beneficial for a beginner real estate investor as it’ll help you start building your own network of professionals whom you can trust and rely on for future property investment deals.

#4 Agents Spot Potential Problems

Next on the benefits of hiring a real estate agent is also great for both property buyers and sellers. When selling a house, owners need to make sure that the property is in great shape. That helps in attracting more buyers and potentially sell the property faster and at a higher price. Buyers, of course, are also looking for homes for sale that are in good conditions so they don’t have to spend money on repairs after they’ve just paid for the house. However, there are some problems that might not cross your mind or that may be hiding out of site and which could potentially disastrous hazards.

This is another reason why you need a real estate agent. Realtors have trained eyes that identify potential problems that you may not see like furnace issues, roofing problems, leaks, and mold and insect issues. An agent will also have a home inspector provide a detailed report on problems with the house. A buyer’s agent will have a good sense of what’s reasonable repairs to request. If you’re a seller, your property agent will let you know of the best approach to fixing these issues. Remember, your real estate agent responsibilities include protecting your interests, so this knowledge will help you save thousands down the road.

#5 Agents Provide Valuable Price Guidance

As a homeowner, you might think you know how much your house is worth. But is the price that you’ve arrived at reasonable? Most of the time, emotions may cloud your perspective which would lead to overestimating your home’s value. Some might also stumble on the wrong side of the equation and drastically undervalue their homes. The only way for you to know for sure is by identifying real estate comps that confirm that you’re in the right range. This will help you sell for the optimal price or buy at the right price. But, the easier way is working with real estate agents.

Most real estate agents can set a price on a home the minute they walk through the door. While anyone can spend a few minutes online and pull information on sales of comparable properties, agents have the experience to know whether a specific house is overpriced or underpriced. They will also perform a comparative market analysis to evaluate all the data that affects home values. As a result, they help sellers develop an accurate and realistic listing price that would attract buyers. Buyers’ agents, on the other hand, will help in making the right choice regarding how much to offer on a house.

#6 Agents Have Superior Negotiating Skills

benefits of hiring a real estate agent - negotiation

Buyers and sellers want one thing: to get the best real estate deal possible. To achieve this, you need to have savvy negotiation skills. Negotiating directly with a buyer or seller is difficult, which is another reason why use a real estate agent. Realtors are skilled negotiators as they have years of negotiation experience under their belts. They know what normally works and what does not. Moreover, it’s your agent’s job to always strive to get you the best possible price – whether you’re selling or buying an investment property. They will use their analysis of real estate comps in the area to build a strong case so you can get top dollar. And, most importantly, they have no emotional stake in the outcome that can cloud their thinking.

#7 Agents Provide Home Staging Advice

Selling your home but not sure if it’s aesthetically up to par? Your agent can handle that! The goal of home staging is to make it easier for buyers to see themselves living in the house. This will help find a buyer quicker and decrease your time on the market. And agents are pros when it comes to staging homes for sale and makes them look great to attract the right buyer. A top real estate agent knows what buyers are looking for and uses his/her tools and resources to make your home appeal to the most likely buyers. Whether it’s moving furniture around or bringing in some of their own props, they know to make your home look like it’s ready to be sold.

#8 Agents Have Access to Off-Market Listings

Are you still wondering do I need a real estate agent to buy a home as an investor? Well, here’s another reason why you need a real estate agent – access to off-market listings! MLS listings and property search websites can show you an array of properties for sale in an area. However, there are cases in which sellers don’t want the fact that they’re selling to be widely publicized. So, they don’t list their homes or put a “For Sale” sign on their yard. In those cases, only agents are aware that the homeowners are looking to sell and try to find buyers.

Hence, one of the best ways to find off-market properties is by working with real estate agents. Savvy investors know that these real estate deals are some of the best investment opportunities out there because they’re cheap and have high ROI potentials. With access to both listed and off-market properties, your agents can offer you a wider selection of investment properties to choose from. The more options you have as a real estate investor, the better your chances of finding the best investment property that fits your criteria.

#9 Agents Know the Best Marketing Techniques

This is one of the benefits of hiring a real estate agent that sellers should pay attention to. Many who choose to sell a house without a realtor end up either not selling or selling for less than their asking price. One of the reasons why those “for sale by owner” deals don’t sell is because they’re not marketed well enough to attract buyers. Property agents and realtors, on the other hand, have been working in the real estate industry for several years and know that best marketing strategies that will get the house in front of potential buyers and make sure people show up for an open house.

For example, they might already know someone from their network who is interested in buying a home exactly like yours. They also have access to the Multiple Listing Services. A person without a real estate agent license can’t have access to the MLS. So if you want your home to be posted on there, you need an agent to post it for you. This will greatly increase the amount of exposure your house gets. Not only that, but agents also know what to focus on when marketing a property. They know what a specific buyer is looking for and how to market it to the masses.

#10 Agents Save Time and Energy

Closing a real estate transaction is typically a long and lengthy process. Working with real estate agents, however, can make the process easier for you. If looking to sell a property, the agent will handle open homes and showings so you don’t have to make all those appointments yourself. The sellers’ agent will also filter all those irritating phone calls that lead to nowhere and, hence, help you in identifying serious buyers. If you’re a buyer, your agent will similarly protect you from being inundated with calls and the marketing tactics of sellers.

Moreover, the process of closing real estate deals involves exhaustive paperwork. This includes tricky contract documents, requests, offers and counteroffers, settlement statements, federal and state-mandated disclosures, and more. Most home buyers and sellers are shocked by the sheer amount of paperwork they need to deal with when closing a deal. You can make things a whole lot easier for yourself by hiring a real estate agent who knows how to handle everything, makes the process more convenient, and ensures that nothing falls through the cracks.

The Bottom Line

Whether you’re buying or selling a home, an agent is your ally. As you can see, there are numerous benefits of hiring a real estate agent. Keep in mind that agents and realtors depend on referrals to grow their business. This means they’ll make all their efforts to ensure you’re happy and satisfied with their service so you can recommend them to your friends and family. In addition, the agent you hire is going to be around for the long run and will be there for you when you need to sell or buy another property. This is a bonus benefit and one more reason why you need a real estate agent.