What price is your House?
How much is your home worth?
The road many travels, on and down, only to reach a number recorded in the public records.
How do we get there?
It starts with the owners. There be no market without them. They decide for various life changing situations, the need to sell. Some being:
The house too big
The house is too small
Death in the family
I got a job transfer
I lost my job
My child school
The house is too costly to maintain
A grateful/dreadful divorce
I need new excitement
These are some. Sure you can add to this list. This situation can decide the original price for sale. Seller motivation is important.
Seller pride is equally important, however often blinded and misguided. I am sure and hope, the addition to the house, was done for enjoyment. There is little value to that enjoyment when it comes to pricing. Not saying additions does not add to value. Just not equal to the cost. However, true, the cost of these additions, does not necessary equal the addition in pricing the house. Home improvement rarely returns costs. The surprising return on investments in a house is in the front door entry recorded returning 101% of the cost; then a remote control, workable garage door. In studies, I read, deck, patios, backyard, are as attractive to buyers, as Kitchen and bedrooms. One would hope; sellers would make these room appealing to potential buyers for they were important to them in their living those places they are about to sell.
The location is critical. But how many "locations" follow the first one? (Location, location, location). However, you cannot do much about this other than what the neighborhood did to itself, the seller maintaining the house, natural disasters or the hands of government interference. Undoubtedly the reason the seller brought the house initially; will have potential buyers wanting the house for the same reason, or even better, the vast improvement of the neighborhood made since the seller first moved in. The home appreciated that much more when the community appreciated along with the house.
What is the price?
First, the price is determined by the seller. They are going to have certain motivation and pride to come to terms with according to market condition. The question is when? Then they have to decide if the house is going to sell by themselves or enlist the aid of a professional real estate agent.
He most likely going to get offers from many real estate agents, to do a free CMA, Competitive market analysis’s, to determine his range of pricing should be. Strange things can happen, in these meetings, a price is reached, and perhaps marketing plans are planned.
This price can be the results of three possibilities. The most promising, the price reflected the results of the CMA. Assume the CMA is correctly done. The other reasons, the real estate agent surrender to the pride of the seller, and listed a price, the seller wanted, just to get the listing and free advertisements. The real estate agent, could not care, he distorted the pricing of other CMA in the neighborhood about to have a CMA done. Remember, garbage in, garbage out? More reason to pay attention to sold prices more than listing prices. Pending prices, what are they? What was the actual price agree upon at execution? Is it the same price listed on the MLS? The agree price the house change its status from active to PENDING?
The other scenery is motivation, quick sale. Here the pricing can be lower than opinionated value a CMA gives. This number does not show up anywhere than in the comment section of the MLS listing. “House under value, Seller motivated to sell.”
All these possibilities exist when pricing a house about to go listed in the MLS. Again, what the houses sold for, offers better insight to what true value is when considering the market condition. However how far back did the sale take place? What was market conditions, then or now? What is the percentage difference of that sold house vs. the price of the new house about to go listed? Does this give more insight to pricing new listings as to what that price should be? Could this add value to opinions when a real estate agent priced a house? Do the know what present Fair Market price of homes in the neighborhood, defined as Pending Houses? How is a CMA are done? Three listed, three pending, and three sold.
I am sure, you may be thinking, the price is that between a buyer and seller, dealing at arm’s length that will determine the price. The seller’s finally going to accept the offer a buyer is willing to pay for the house.
My question I have asked myself…. Is this true value? The market value? Is Pending pricing Fair Market value, a fact, or extension of an opinion, the listed price, before an executable contract?
What is your opinion? I would add my thoughts in a future post.
Thank you for spending some time with me. Please leave your comments.
Till Next Time,
Ronald Wolchesky What price is your House?
