PRICE, LOCATION, & CONDITION
Having worked in the real estate industry for the past 20 years, we have seen the highs and lows of the market. We been through numerous booms and one fairly large bust. We’ve watched as available technology and online reach have rapidly developed, some with great outcomes for buyers and sellers and others not so great.
At the core, beneath all the novel ideas of marketing, technologies, advertising, and sales strategies, there are three consistent absolutes to getting your home sold regardless of market conditions or buyer preferences: Location, Condition, and Price. Having all 3 going for you is a trifecta!
Apply trifecta properly and your home will absolutely sell – even in a bad market.
Remember, the market is its own system. No one person can control market value. No one can make it something it isn’t. And by and large, no one can pull a fast one on it… with few exceptions.
1. Location: the standard for real estate value
Location, location, location! has always been the key to establishing value and sale-ability in the marketplace. Location is about ‘local’ issues right down to the home’s very neighborhood, situation on its lot, and general setting. If your home is in a desirable location – be it walking distance to downtown coffee houses and restaurants, or a beautifully designed and maintained neighborhood – it will sell faster and for more money than other homes in its price range.
For example, let’s say a home’s market value, determined by an independent valuation (not by Zillow or Open Door!), is $475,000. Perhaps this is a 1,200 SF 2-bedroom, 1-bath home, but it is just 3 blocks from downtown activities such as restaurants, shops, parks, etc. That home will absolutely sell faster and for more money than a home of similar statistics located on the edge of town or on a busier road.
Location is the only aspect of the trifecta over which you as the home owner have no control. The home is where it is. If the location is a benefit to the home, it will overcome obstacles in condition and will likely mean a better sales price. If the location is less desirable, that can be overcome in either condition or price, or with both.
2. Property Condition: your own brand of marketing
The trend has historically been that the vast majority of people want a turn-key home that needs only minor cosmetic customization based on the buyer’s preferences. But the rise of the home-owner DIYer, fueled by HGTV, YouTube tutorials, and sky-high home prices has shifted that trend over the last 10 years, albeit only slightly. Busy buyers will still predominately prefer a move-in ready home, especially when combined with a coveted location, and they will pay top dollar for it. The repairs that can cause the most trouble in a transaction are the invisible, less glamorous ones: plumbing and electrical fixes, crawlspace issues, roof and gutters, replacement windows, water heater, furnace, cracked concrete, etc.
Consider again our example home valued at $475,000, just 3 blocks from a desirable downtown. If that home-owner has a great design sense, tasteful décor, and a beautifully maintained interior and exterior, they have effectively branded their own home and have achieved the trifecta! They have a home in a desirable location, in beautiful condition, and have priced it according to current market value. It will sell for top dollar, possibly with multiple offers from buyers competing to get the best home on the market in their price range.
BUT, consider that during the home inspection it is determined that the furnace is on its last legs, the basement has standing water issues, and the roof needs to be torn off and replaced. It is possible that a buyer wanting that home in that location at that price would overlook one major issue, but not 3. The seller of that home will be making some repairs and/or price concessions to address some of the deferred maintenance uncovered in the home inspection report.
3. Price: it can sell anything, anytime!
Nothing is as important as pricing the property accurately. Regardless of the condition of the property, market conditions, or location issues, the price can be adjusted to compensate and sell any home in a reasonable amount of time. The bottom line is that pricing, appropriate to the goal of the seller, works even when other efforts do not.
Buyers today have almost all market knowledge immediately at their fingertips and they are savvy about good values, deals, steals, and overpriced properties. Keeping in mind that market value is that price at which a seller is willing to sell and a buyer is willing to buy, a buyer will set a home’s sale price, to a certain degree, as much as a seller will.
In our above example, the home’s market value was determined to be $475,000. But let’s say the seller did not want to sell for $475,000; they wanted $545,000. While it is certainly a seller’s prerogative to offer it for sale at $545,000, and they may even have a Realtor® willing to list at that price, chances are a buyer searching for an entry-level, 1,200 SF home would compare it to others listed for under $500,000 and opt to purchase something more in line with current market value. The seller who prices their home right in line with the market creates urgency in the mind of the buyer, and will likely get a better price in a shorter amount of time than the seller who over-prices a home in the hopes that they will get lucky.
There are plenty of other factors to consider when selling your home, and we are happy to talk through any/all of it with you. If you are considering selling your home, please reach out to us here to request a free market analysis.