The 3 L’s & 4 C’s of House-Hunting
Don't sweat the stuff that can easily be changed
By now, we're probably all familiar with the famous three L's of real estate: location, location, location. But if you're shopping for a house and limiting yourself to those three L's, you might be doing yourself something of a disservice. Keep the L's in mind while you're on the real estate trail, but I'll show you how to use them to expand your thinking a little.
The three L's
The most important one of the L's definitely still needs to be location. When you're buying a home, there's simply no substitute for location, since you can't move the house after you've bought it. (Well, technically you can, but that's obviously not exactly your first choice for how to approach things).
Location can mean a lot of different things to a lot of different people. It might be a short commute to work. It might be a particular school district. It might be an older established neighborhood, or an area with lots of parks or shopping, or an active social scene. If you need to be in a particular location, that should be one of the first criterion for your search.
The next L is for "land" or "lot size". This is another thing that you can't easily change about a house, so pay close attention to it. You may find the perfect house in the perfect neighborhood, but if the lot's too small, or on a busy corner, or has a slope or an odd shape that won't fit that pool you want to put in some day, then no amount of rationalizing about how great everything else is will ever change that.
The third L is "layout". Pay particular attention to how the house is laid out, and whether that layout is going to work well for your particular needs. The flow of the house is extremely important for your everyday needs. Is it the one- or two-story house that you wanted? Is the kitchen open the way you want? Are the bedrooms on the floors where you want them? Layouts can be changed to some degree, but often not easily and can be expensive. The changes can sometimes require extensive remodeling work. So it's definitely better to get what you want from the outset or as close as possible.
Don't sweat the C's
The three L's are all something to pay close attention to, because they're either impossible or potentially very costly to change. But a lot of buyers can get hung up unnecessarily on another group of real estate letters: the four C's. This group can sometimes blind you to the potential in an otherwise ideal home.
The first C is "color". Before you walk away from that cute house on the big lot with the ideal layout because of the purple bedrooms and the wallpaper in the dining room and living room, stop for a moment. Those things are easily changed.
A couple of long weekends of sweat equity and a few hundred dollars can make a huge difference in how a house looks. It also gives you the opportunity to put your own personal stamp on the home, and really make it into something you can call your own.
The second of the C's is "condition". It's easy to be turned off to a great home in a great location because the overall condition is run-down or outdated. But remember, as long as there are no major structural issues, condition problems can be taken care of. And they can also represent a great negotiating point, especially with a motivated seller. This can also apply to specific components of the house, such as the roof, the windows, the flooring or the heating system.
If you're not sure exactly when a condition item crosses the line from run-down or outdated to a genuine problem that affects the structural integrity of the house, that's where you need to rely on the experts. If this is a house that you're seriously considering, it's time to call in a home inspector or other professional to help you evaluate how extensive any potential problems might be.
Next on the list is "clutter". For some reason, a lot of sellers don't take the time to declutter their homes before they list them for sale, and that can make for a poor showing. Don't let that throw you. If you're a savvy buyer, you can learn to look past the clutter, and visualize how your own furniture will look in the space.
Take a tape measure with you. If necessary, you might even ask if there's a floor plan drawing of the house available. If so, there are scale furniture cutouts available inexpensively online that will let you quickly place your own furniture in the existing rooms to see how things will fit.
The final C that you don't want to sweat too heavily -- no matter how much it might gross you out -- is "cleanliness". If the sellers are foolish enough to leave the house dirty, they're simply inviting lower offers, so take advantage of it. Look past the dirt, and possibly buy yourself a great house at a bargain price.
The New 3 L’s
The first rule of real estate is the 3 L’s….Location, Location, and Location. In a declining market such as this we might think about adding 3 more L’s to our real estate experience. In my opinion these would be Learn, Listen, and Let Go.
Learn to adapt to this market. Realize that what worked before is not necessarily going to work today so learn how to price your property appropriately and then learn how and when to adjust it. If you are looking to buy, learn how to make a solid offer before your dream home is sold to someone else. You don’t want to be caught in the dark, being prepared is always best. Learn all of the parts of a sale contract and the process of buying/selling a house so that you feel comfortable discussing all possible scenarios and variables when that contract is written.
Listen to the economic forecasters from the National Association of Realtors. They recently published an article about how the unemployment rate is directly tied to real estate trends. They believe if unemployment goes down in the next quarter we can most likely consider the worst is behind us. Listen to an established real estate professional. They are the ones that have made this their career. Every single day they access the latest available property list. We can tell you what has gone down in price, what is under contract, and what has sold for less than asking price. Point being, they actually do know what is happening in the market place and it’s not just from watching the nightly news. Listen to what these people are telling you and follow their advice. Remember this is why you look to them for their knowledge in real estate.
Let go of anger and resentment about the economic climate. Let go of blaming anyone or anything for the current state of the market. Let go of comparing neighborhood sales from the past 3 to 5 years to what they are selling for now. If you can get past these things and understand that it is a fact that people still need to move for their own reasons. Then you are truly “letting go". A house may not be worth as much as it was in 2006 (when it was, in all probability, over-inflated) but that should also come as good news if you are looking to buy.
By listening to the information provided by professionals, learning how to adapt and react to this market, and letting go of negative re-enforcements, you can have a great experience. I believe you hold the keys to a successful real estate transaction.