The Price Is Right!
The Price Is Right!
I’ve said it before and now I’m repeating myself-for eons that many 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 CincyMLS (Multiple Listing Service) defies the wisdom of this type of thinking.
The truth is real estate has always been about “The Price is Right!”
Think about it -if it’s priced right- the “worst” home in any neighborhood sells.
HomeSearch
Why?
According to NAR (National Association of Realtors) 90% of buyers start their home buying search online. They are comparison shopping before they actually walk into a home. Think about it- most buyers have looked at tons of home before they ever walk out the door to house hunt. In a world of digital house hunting 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- ( buyers don’t really care what sold a year ago in your neighborhood- they are comparing your property to other properties currently for sale)
- tallying up all the things they have fixed or upgraded such as: new landscaping, roof, 95% efficient furnace, hot water heater (buyers think- “welcome to home maintenance”)
- summarizing all the improvements such as big deck, gourmet kitchen, lower level entertainment center, custom flooring…..(buyers think- “wow their taste is really different…we’ll be ripping out the ugly dark kitchen cabinets before we move in)
- just because I paid $$$$$$$ 5 years ago and it must have appreciated (buyers think- you overpaid, or you added no value with upgrades or there are 8 other houses within a mile that I can buy for less.)
Sellers need to understand that #1 doesn’t sway anybody. 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. And if they are willing to pay more, appraisals often stop the process- because if comparable homes are selling for less- don’t expect an appraiser to say the home you just purchased is worth more.
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’re savvy about values- and may not even look at your listing because they view the pricing as unrealistic.
If you are considering selling your home or been on the market for sale for a while, focus on “The Price is Right” and the buyers will do the rest.
