Perhaps you’ve never bothered to think about it before, but about the only thing buyers and sellers have in common is the property that’s being transferred. Buyers have goals to reach when buying a house, as do sellers, and rarely does either set have much to do with the other.
Today’s housing climate doesn’t do much to ease the stress points of a real estate transaction either. Even in the best of markets, buyers don’t want to spend more than they should on a house, whether it be keeping the monthly payments low or making sure they don’t overspend on a property. Depending on comps and finishes, it’s pretty easy to determine fair market value from the buyer’s end.
Sellers, however, tend to have a different opinion of fair market value. Granted, they want to net as much out of the final sale of the house as possible, since they’re likely going to fund their next purchase with those proceeds or simply cover their closing costs. The challenge is making sure that sellers understand what goes toward their final sale price. Actually, a better way to put that is to make sure that sellers understand what doesn’t go into the sale price. Things such as:
- What you need to make
- What you want to make
- What you owe against it
- Recent appraisals
- Personal attachment to the home
- Sales prices of neighboring homes from last year
Of those bullet points, care to venture a guess which adds more value to a home, in a seller’s eyes? In today’s market, it’s probably what a seller owes against the property, but in many cases that I’ve experienced, it’s the personal attachment a seller has to his/her house. Most home-owner bonds are as unique as fingerprints. People buy houses for their own reasons: location, number of bedrooms, backyard size, garage size, brick color. And because the buyer that’s looking at the seller’s home might be interested in most of the conventional aspects of a property, their ultimate reason for buying – or, in most cases not buying a house – can be completley counterintuitive to why you love your house so much.
Yes, you can profile who might buy the house all day long, but in my experience, that’s a bad idea. I’ve seen rock stars move into suburban neighborhoods; I’ve seen retirees look for downtown lofts. You know that cute vaulted ceiling in your living room that reminded you of Paris so much that you bought the house for that reason alone? The next buyer might drywall and insulate it off to save on heating bills.
If you’re looking to find out what your house is really worth on the open market, you can be sure that location, physical condition and the buyer’s ability to get financing will be your deciding factors. Yes, neighborhood comps are a good way to determine list price, but those buyers aren’t in the market anymore and you get to work with someone you’ve probably never met before, and probably have very little in common with, except for the mutual admiration of a property that you need to sell and they would like to buy.
For more real estate commentary: go to Karl Sells Denver for links to more of his real estate resources. You can find his current listings, testimonials from past clients, professional contacts and a complete resource list for vendors, contractors and services for any project you can think of. You can reach Karl at 720-971-8267. Or email him here or at firstname.lastname@example.org.