Everyone’s heard the old adage, location, location, location. But what does that really mean and why is it important?
I had a partner years ago that explained it this way: The first location in the phrase is in reference to the town that you’re looking in. The second is the neighborhood within the town and the third is the specific home site within the neighborhood within the town. That pretty much nails it, I think. So, let’s talk about why this is important to a home buyer. First off, quite obviously not all towns are the same. In the Conejo Valley where I conduct the bulk of my business, the 800-pound gorilla is Westlake Village. I tell my clients it’s the last place to drop in a correction and the first to come back. For this reason, it’s a great place to “park your money.” Because of the Kardashians, many people are familiar with Calabasas. Calabasas is a popular location because it’s the closest east, or closest to Los Angeles that you can live, without being in Los Angeles Unified. Clearly the town is important.
The second location is no less important. Where in the town? Could be within the proximity or the sphere of the school you want your kids to attend. Or maybe it’s the one with the views or bigger lots, or perhaps it’s gated or zoned for horses. Finally, the last location is the specific lot that a home is placed. For example, a super desirable location is a cul-de-sac. I’ll often refer to the “Big 3” as being the rarest of rare. This would be a view lot (rarest of all amenities), a large lot and a cul-de-sac lot [See what your home is worth here]. Get one or two and you are set. Get all there and you’re in hog heaven and guaranteed, you’ll always have a buyer when you decide to sell – regardless of market conditions. One type of lot that swings both ways might be on a corner. Some people like corners, more open and fewer neighbors. Some on the other hand do not, less private. Then there’s good corners and bad corners. A bad corner for example, might be one where oncoming cars’ headlights flash across your home every time someone turns down your street. Another example might be a flag lot. Some love them – long driveway, more land. However, some buyers want to see the front of their home, so they don’t like a flag lot. A flag lot (so called because the driveway is like the staff and the lot like a flag flying in the wind) often times is landlocked by other homes too which can be a negative.
Then there’s the location challenged properties. These would be backing up to something like the railroad tracks or a school for example, commercial or something unsightly or even a health concern like high tension lines [Find us on social media here]. Busy streets, through streets etc. are typically to be avoided when possible. That said, I sell homes wherever my clients want. I do however, inform them of the location challenge and remind them that this can be OK, so long as they “buy it right.” This is because when it comes time to sell, they will in all likelihood, have to discount their property to move it.
This gets us to why location, location, location is important. In a market like we have been in, we have seen a preponderance of inferior location homes come and go. In a market like we are coming from, one that’s a super-hot seller’s market, locationally challenged homes get to take advantage of the fact that buyers will overlook location issues and because prices are rising, often time pay an amount equal to a superior location. This is bad business, but this happens all the time.
As we transition from a seller’s market to one that may be a little more balanced, those locationally challenged properties are going to have a harder time finding a buyer. Should we end up moving into a buyer’s market, the negative location becomes even more pronounced because in a down market, there will always be a better location that has to sell at the same time as you and will discount some to accomplish this. Therefore, if you can buy theirs for “X” you clearly can’t sell your home backing the supermarket for “X,” rather it must be “X-Y” – or else the buyer will just buy the better location… every time. Makes sense, right? And since a correction in the real estate market is not a question of if but when, “buying right” is incredibly important [Contact Tim here]. The best way to avoid trying to thread that needle, is to always buy location, location, location and to hire an agent that puts your interests ahead of all else.