3 Key Words in Real Estate

March 5th, 2008 categories: Cincinnati, Ohio, Real Estate News, Real Estate Selling

For eons consumers have been brain washed into believing the 3 key words in real estate are location, location, location!

Conventional wisdom stated that if you purchased a home in the right location-the sky was the limit when you decided to sell. It would appear the number of properties stagnating in the MLS (Multiple Listing Service) defies the wisdom of this type of thinking.

Real estate has always been about price!

Priced right- the “worst” home in any neighborhood is defying the odds and selling in under 60 days.

Why?

According to NAR (National Association of Realtors) 77% of buyers start their home buying search online. They are comparison shopping before they actually walk into a home. If your home is one of many on the market, with essentially the same square footage, number of rooms, property taxes and school district- why would the buyer pay a 10%, 20% or 40% premium for your house?

Most sellers justify price premiums by:

commenting on the prices of homes sold in the past- ( call that yesterday’s news)
tallying up all the things they have fixed or upgraded such as: new landscaping, roof, 95% efficient furnace, hot water heater (call that- “welcome to home maintenance”)
summarizing all the improvements such as big deck, gourmet kitchen, lower level entertainment center…..(call that- “what I did for my/our own enjoyment)

Sellers need to understand that #1 doesn’t sway anybody but an appraiser and appraisers are not buying your house. Items in #2 may be viewed as a slight plus- but do not expect recoup dollars spent on home maintenance items. #3 is often trickier to cost out because your $50,000 gourmet kitchen with dark cabinets may not appeal to the non-cook who prefers light cabinetry. And if the other homes for sale also have upgraded kitchen ($25,000 range to upgrade) and everything else is fairly equal….pricing becomes the buyer’s key decision making component….and they will not pay a premium for your property.

I am sure by now some of you are still thinking I don’t understand how important location can be- and truly -I do understand. However as a professional in the trenches- I can tell you that today’s buyers have a wealth of comparison data available online ( Trulia , Zillow, local auditor’s sites). They are savvy about values- and may not even look at your listing because they view the pricing as unrealistic.

house of money