I'm Not Going to Just Tell You What you Want to Hear
I had an interesting listing appointment this weekend. I brought data from three different sources regarding values, as well as current comps, market trends, and information gathered in order to ACCURATELY portray the real estate climate in this particular NW Tucson neighborhood. Of course, you never know about upgrades and improvements, which can affect the pricing as well.
First off, the owners showed me their home and I was happy to see some changes that improved the value of the home.
Upgrades included a very important plumbing renovation that removed all polybutylene piping. Appliances were all included, newer water heater, newer pool pump and fence, and the fascia board trim was in good shape.They'd also redone the cool decking.
I had sold a home earlier this year, just down the road, approximately the same size. Both were close to 30 years old. My other listing sold for $158,000 ($120 a square foot) and the home had been re-vamped and oomped up by a licensed contractor for three months before it went on the market. There wasn't much that wasn't new. (inluding poly pipe replacement)
Comparing the two, I was formulating a number value in my head.
The home had some challenging finishes that buyers often comment upon:
- Not everyone likes what we call "popcorn" ceilings.
- Laminate flooring. 6 inch square white tile in kitchens and hallways.
- Formica-type counters
- Original culured marble swirl vanities
- Original oak cabinetry
- Original windows
- Original paint
- Pool that needed re-surfacing, along with extensive front and back landscaping. (Front yard overgrown with mostly dead brush and trees)
All in all, I was thinking, $162,000-$165,000 for this home that was a just over 1300 square feet. But of course, the list price is always the sellers' decision.
Their Dream Price: they told me they wanted to list at $186,500 or $135.37 a square foot.
So, let's break it down. The community Active listings averaged $94.90 a square foot. (that would make this home $130,393 -- but of course smaller homes are always worth more per sqft) , There are two other listings for sale in the $180's, but they are over 2000 square feet in size. And one has a pool. Regarding sold comps, two have sold, after 181 and 128 days. Prices: $152,900 and $172,000. Both homes apx. 1650-1715 square feet with poly pipes removed. One is under contract, 2016 square feet with a list price of $156,900.
I talked to them about the community buyer history being predominately an FHA buyer. I showed them the histories. I talked to them about the appraisal. I talked to them how ultimately, the buyer determines the price, and the appraisal confirms (or doesn't) the value. We talked for nearly an hour.
Their hearts were set on listing at a price thousands of dollars above all others. They said they've talked with another agent that supported their price. I warned them about going with an agent that makes promises not based on fact. There was nothing on paper I could find to support that kind of pricing.
Well, I got my dear john letter later that night, which was actually very kind of them. I wished them well with their new agent.
Meanwhile I put the home on a "watch". It should be interesting to check what's happened in the next 6 months. My guess is, the sellers are either going to have to drastically reduce, or they will cancel the listing and the agent who took on that price tag will be out a lot of time, energy, and advertising dollars.
No, I won't exaggerate and tell you your home is worth over 30% more than your competitors - unless it is. I spend a great deal of time doing the best I can to accurately present the market to prospective sellers. This isn't a game of numbers - it isn't a game at all.
I take my job seriously, and I work in the best interests of my sellers. I'm happy to say that with my last closing, list price of $199,000 - I was able to negotiate a closing price of $205,000.
And yes, it appraised.
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