It is a phrase you will inevitably hear if you are searching for a home to purchase; “there are three things that matter most in choosing a house; Location, Location & Location.”
The phrase has been around a while and it’s a cliché for sure, but there is truth to it that is worth taking a moment to delve into.
The phrase points to the most important criteria for selecting a home; it’s value. Value is what the home is worth, both to you as a buyer and what it might be worth in the future when it comes time to sell.
The value of a home is determined by what a buyer is willing to pay for it. And despite how much a seller might love the home and its many benefits, the house is on the market with other homes that may or may not have similar attributes and it’s the choice between houses available to buy that drives value.
Location involves two major consideration; the neighborhood or area of town, and the specific physical location of the house in relation to others nearby.
A 3 bedroom, 2 bath home in Beverly Hills will sell for considerably more than a house of the same size in Boyle Heights. When I work with buyers in the $650,000 range, there are very few choices in Silver Lake or Echo Park but many more in Altadena or Glassell Park. Price will steer you towards some neighborhoods over others because you can get more house for less.
Value is also defined by where a home is in the neighborhood. For instance, a house on the corner may sell for less than one in mid-block because there is more exposure to traffic on a corner lot.
Your daily commute tends to drive the neighborhood or area of Los Angeles people consider living. If your job is in Santa Monica, you are probably not going to be looking in Monrovia for your new home, even though you can get a restored craftsman there for under $700,000. But some buyers are more focused on the style of the home than the specific neighborhood it’s in and may look in a wide range of areas to find the perfect house.
The bottom line is that once you know how much house you can afford, check various neighborhoods for what houses are going for and focus on a specific area, your home search will go faster and be less stressful. If you are looking at houses in Highland Park & Monrovia, you probably are going to have too many options to consider and you will find too many excuses to pass on houses as they hit the market.
Once you have an area to search, the location within the neighborhood becomes pretty easy to factor. If the house is adjacent to the freeway or next to an apartment building, you will see the price reflect that. That’s not to say that it is a bad choice. If the house is perfect in every way and in a great neighborhood but across from a High School, you may want to make an offer on it because it offers the best value in a higher priced area. Buying the worst house in the best neighborhood is another often repeated phrase that reflects an underlying reality of real estate.
So if your agent is often repeating the phrase “Location, Location, Location”, don’t assume she relies on hackneyed sayings, she is guiding you to focus on getting the best value for your purchase.