Order ID 6463784949 Type Essay Writer Level Masters Style APA/MLA/Harvard/Chicago Sources/References 6 Number of Pages 5-10 Pages Description/Paper Instructions ?We have studied nine reasons why the real estate market is imperfect. As real estate professionals, we help shape the market. Knowing that the market is imperfect, we will be able to spot good deals. Hence, we are the Great Deal Finders.
Task.
?In this exercise, create a fictitious profile of a real estate buyer, including his or her gender, age, preferences, financial status, etc. Then use a free, online listing site like zillow.com or realtor.com and find a listing for him or her according to his or her preferences.In bullet form, below are the characteristics of an imperfect market, how we shape the real estate market, and the factors that influence changes in demand. Behind each factor, put a dash and elaborate how that factor is relevant in your selection of the property. This checklist is a good outline of things to talk about while showing properties. My example is at the end.
Characteristics of the imperfect real estate market
? Buyer’s market or seller’s market
? Market information is imperfect
? High transaction cost
? Complex transaction
? Absolute lack of uniformity
? Localized market
? Large in size, rare and infrequent sale
? Prices are not exactly equilibrium price
? Government’s roleHow we shape the imperfect market
? Provide current prices
? Spot and advise opportunities
? Help with financing
? Persuade owners/landlords to sell
? Persuade renters to buyFactors that cause changes in the demand for real estate
? population
? income
? credit availability
? personal taste
? government action
? adsFactors that cause changes in the supply for real estate
? substitutes
? conversions, construction
? Factors that cause changes in the demand for real estate
? demolition, destruction
? cost of construction material
? government action
? technology
? internetWATCH VIDEO: https://youtu.be/W77s-sX5bwk
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EXAMPLE:
My fictitious buyer is the chancellor of the community college, who is looking for a house near Mesa College to serve as a second home when she travels from Sacramento to San Diego to conduct businesses here. The chancellor has hired me to find a house for her. The state budget is tight, $450,000.Characteristics of the imperfect real estate market
? Buyer’s market or seller’s market – chancellor, it is an urgent time to buy because there are more buyers than sellers; it is a “seller’s market”: they have a substantial influence over price. We need to drive a hard bargain.
? Market information is imperfect – the community 92111 is where Mesa College is located. There are many students who would like to live near the college; but homeowners may not know this; instead they are annoyed by students parking on their streets. Now there is permit requirements. This area was built about the same time as Clairemont; thus sellers compare to and list their homes at prices in Clairemont 92117, which is much lower. Their lack of knowledge is your gain.
? High transaction cost – brokerage service 6%, escrow fees, transfer taxes;
? Complex transaction – standard 30 day escrow. No short sale waits.
? Absolute lack of uniformity – although most houses here have 4 bedrooms, 2 baths, 1,500 s.f., lot size 6,000 s.f., many have done room additions to the original structure. Some houses have canyon views. This house has a private pool. During the summer months, it could get as hot as 90 degrees. It would be a perfect time to jump in the pool. Not all properties here have pools.
? Localized market – very few people from outside of San Diego looking in this area;
? Large in size, rare and infrequent sale – average size, on the market 19 days thus far.
? Prices are not exactly equilibrium price – the main reason I chose this one is because many 4bed/2bth homes are listed above $500,000. This is below equilibrium price. Thus a great deal.
? Government’s role – zone R1, no HOA, no Mello Roos, free street parking.How we shape the imperfect market
? Provide current prices – chancellor, asking price is $440,900. I think the seller has few offers. I recommend making an offer at $432,000 and see what they counter back. We will try to close with all costs at below the budget of $450,000.
? Spot and advise opportunities – all upgraded tile floor, and added living room for you and other college staff to conduct business, this is a great opportunity; all new kitchen and bath, 4 bedrooms, unlike other similar properties here that have 2. Easily rent it out to students during the school year. It is 3 minutes away from the college walking.
? Help with financing – government program, state budget approved already.
? Persuade owners/landlords to sell – NA
? Persuade renters/buyers to buy – close before the semester is over; I highly recommend that we make an offer this weekend.Factors that cause changes in the demand for real estate
? Population – growing trend, SD seniors and retirees on the rise; but they would not buy in this area because of the college students.
? Income – middle. Currently with unemployment high, discretionary income dropped.
? credit availability – Fed to increase money supply, interest rate dropping, but no need since this is state funded.
? personal taste – chancellor, you indicated that you like spacious rooms; this one is very spacious with the added living room. Majority of the home buyers want to buy two stories with small yard. This has a big yard and deck where you can you can exercise.
? government action – NA
? ads – no ads that make this college town more desirable, thus still buyer’s market.Factors that causes changes in supply of real estate
? substitutes – no student dorms or mini-dorms.
? conversions, construction – mostly adding on in this area; apartments along Balboa are not being converted to condos, thus will not effect the housing market.
? destruction – NA
? wages – stable income, middle class, tax decrease allows for more disposable income, but unemployment high.
? cost of construction material – steady and moderate; with a Home Depot nearby, any remodels would not have high transportation cost of building material.
? government action – NA
? technology – green movement in housing with solar technology to be installed, already on campus. This house does not have solar yet; but CA has a new program called Energy Upgrade CA, which will give tax credits to solar equipped homes.
? Internet – before you come to see the house, I can email ***Link:
http://www.realtor.com/realestateandhomes-detail/6972-Glidden-St_San-Diego_CA_92111_M***?row=8
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