Jan 23, 2012
Your location, determines a great deal - just like the make of your car determines a lot of its value. If you have a Honda, you can't add leather seats, custom paint, supped up engine, ... and call it a Lexus. Even if your home is fabulous, your neighborhood will determine much of your value. Your agent should be able to tell you what the average sales are in your area for similar properties. This will tell you if your neighborhood is more like a Ford, a Kia, Porche or something in between.
Then comes the condition of your property. A new entry level class-C Mercedes sedan may cost $30,000 while a new SLS roadster starts at $170,000. They are both Mercedes, however their features are different. Does your property have all the bells and whistles of other homes in your neighborhood that are selling? Is it the same age? Does it show as well? Is your agent able to market it to the hilt?
A 35 year old home updated 20 years ago with average features will find difficulty competing with an 18 year old home, updated 6 months ago with all the latest high quality details currently in demand. Is a buyer more likely to purchase a shiny new Toyota with a warranty or a 10 year old Lexus with a big dent in the door and a loud rattling muffler? If the price is the same, the Lexus is going to be a hard sell. How about a 7 year old Lexus with very few miles, no dings or dents and a fastidious record of dealer performed maintenance? Well that's a different story.
But, fortunately, homes are not cars. A beautiful, unique old home can be much more appealing that a new house in the same neighborhood. But it needs a different kind of handling and marketing to appeal to a different kind of buyer.
The reason I use a car/home comparison is to help sellers with realistic expectations when pricing their home. To price your property without the proper research and comparables is like saying all blue cars are the same. If you have the attitude that the buyer will fix the dents and won't care about the lack of maintenance and updates - then you need a reality check and you need to price your property well below the competition. [where: 75230]