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Monday, May 14, 2007
Dear Young Professional,
"I have a question for you - I'm a "young professional," as we are often called, and am considering buying a loft downtown. My main concern is that if I want to sell the place in a few years in exchange for a place in the burbs, there won't be a market for it with all the new lofts that are being developed and the limited sales at this point in time. As the closest thing to a resident expert, what are your thoughts?"
My thoughts are varied. First of all, the fear that downtown St. Louis will be developed beyond sustainable population levels is a misconception. Downtown development is market driven. While the real estate market has been slower in the past year, most developments that have offered a good product for a reasonable price have continued to sell. Developments that are over-priced or lack certain features have struggled. My primary thought is BUY SMART! A good value will hold up regardless of what the market is doing.
My second thought, as a real estate professional, is that home ownership of any kind generally doesn't usually yield a positive return on investment within just a couple years. Our lofts have been an exception to that general rule for the past few years, particularly if they are purchased as "pre-construction." The only problem in that scheme is that most 1st time buyer's are wanting to buy to have a place to live and can't wait the year plus time frame for a pre-construction building to be completed.
Overall, my thought may seem biased, but work with a specialist (buyer's agent). The development companies that build lofts almost always have a sales force that is more than willing to assist you in buying THEIR product from start to finish. A skilled Realtor will usually expose a buyer to all possibilities downtown including new construction. This is free, and as a process, it seems to educate the buyer about the entire market. I generally listen to a buyer and really try to get them to evaluate all areas too. We've worked with potential loft buyer's that end up using us to buy homes in St. Charles or elsewhere in the St. Louis area. Sometimes prospective buyer's decide that renting for another year will work.
Lastly, after living downtown, the thought of trading a loft for a place in the 'burbs will make you nauseous. You'll probably decide on a house in one of the other fantastic city neighborhoods instead.
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While I think it's true that:
"The development companies that build lofts almost always have a sales force that is more than willing to assist you in buying THEIR product from start to finish"
isn't it also true that if a prospective buyer contacts you to look at properties you push them toward YOUR listings?
Good question anonymous one! As a listing agent, I always feel an obligation to my "seller" clients. Obviously. I try not to push clients in any direction, but if I do it would be towards the best deal. Some agents really do push buyer's towards their listing. I hope none of my buyer's would ever feel that way.
I can think of one situation recently where I felt that I was being pushy towards a listing. In that case it wasn't my listing, but a loft that was poorly marketed, poorly represented and priced below market. It was like Pavlov's Dog--and I was the dog. Those deals always get me excited.
What could make this a confusing issue is that until a prospective buyer decides to use me as thier buyer's agent, I really shouldn't show them other listings since I don't represent them.
What seperates a Realtor from a devloper is that I have never heard of a developer that point blank says, "Maybe a loft doesn't suit you, why don't we expand our search to include houses, other neighborhoods, etc." A good professional Realtor should always focus on how to best assist a buyer's needs by finding a home to fit the buyer and not the other way around.
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