Adventures in Pricing - Historic Homes in Urban Neighborhoods

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Education & Training with Sell with Soul

A few months ago (sheesh, almost six months already!) I stopped actively selling real estate. Oh, not to worry, I still keep my fingers in the pie and my toes in the water of the Denver real estate market, but I don't actually list or sell properties in my own name. However, being the control freak that I am, anyone who gets a referral from me can count on lots of - ahem - help from me, especially if they're working with someone from my precious Sphere of Influence. I'm sure my - ahem - help is very much appreciated.

Anyway, I recently referred a sweeeeet Charming Old Denver listing to a fellow SWS'er - Mary Beth Bonacci. It's in one of Denver's many historic neighborhoods and was built in 1908. If you're fortunate enough to work in charming old neighborhoods, you know how challenging it can be to accurately price these homes. After 100 years (give or take a dozen) of renovations - not only of the subject property, but also of the surrounding neighbors, the influx of infill development, changes to perceived trendiness "boundaries," the comings and goings of neighborhood amenities, not to mention school district nuances and zoning codes... you can pretty much bet that there ain't another house just like the one you're trying to Denver Tudorsprice.

Oh, sure, on paper, there are probably dozens. After all, builders weren't much more creative back then than they are today. Drive down a street in Denver's Washington Park and you'll see Bungalow after Bungalow built in 1927 - the tract homes of the 20's. On the next block, you might see Tudor after Tudor built in 1935 - the tract home of the 30's. Similar square footages, similar lot sizes, the same existence of or lack of a basement...

And of course, all the MLS descriptions of your comparables proclaim the homes to be Renovated with Pottery Barn Flair! Or to have a Gourmet Custom Kitchen with Stainless Appliances & Granite Counters! Oh, and in a Perfect Location, too.

But I digress.

I decided Mary Beth needed my help pricing the sweeeet listing I referred to her. And she graciously agreed to let me - ahem - help.

Actually, we had a great time. ‘Specially me - since I'd been out of the loop a few months, it was a bit of a novelty to get out there in the trenches and exercise my pricing expertise again.

But, as it usually does, it amazed me that many agents price simply from what the seller tells them about their home and what the MLS data tells them about the market. In other words, they have a telephone conversation with the seller; spend an hour in front of the computer and voila! They create a "professional" CMA and proudly present it to their seller prospect as gospel.

And proceed to the market with an improperly priced home...

Perhaps this strategy works just fine in a newer tract home development. But in a historic neighborhood? No way.

Stay tuned for some hints & tips on pricing urban homes in historic neighborhoods.... I freakin' love this stuff...

 

 

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Rainmaker
3,799,198
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Hi Jennifer,

It is true many agents try and find out what the seller is expecting in terms of price and make their CMA"s match that number. Facts and true figures do not lie! Knowing your area and homes are of great benefit in lending credibility to your assessment of the value of the property. A proven track record and a sound marketing plan will seal the deal.

Oct 25, 2009 01:58 AM #1
Rainer
78,096
Bill Saunders, Realtor®
Meyers Realty - Hot Springs, AR
www.BillSellsHotSprings.com

Jennifer,

I can't wait for your future posts on this!, and by the way...am LOVIN' your new book!

all the best...

Oct 25, 2009 02:20 AM #2
Rainer
176,189
Julia Odom
Select Realty Professionals - Chattanooga, TN
Chattanooga Homes for Sale

Looking forward to hearing more about this. I wish there was some sort of 'historic home' designation and related classes, I'd really enjoy that. In addition to the variables you mentioned it's realllllllly hard to price a home in a neighborhood that is 'up and coming.'What do you do when the house next door is falling down and condemned (literally) but the home you are marketing is like a brand new house with old house charm?

Oct 25, 2009 02:37 AM #3
Rainmaker
205,005
Kent Anderson
Coldwell Banker Realty-Schweitzer Mountain, Sandpoint, Idaho - Sandpoint, ID
from Schweitzer to the Lake

Jennifer, I can't wait to get you tips on this one.  I've got an historic home listed that was impossible to price.  Not only are there no reasonable comps, but the neighborhood is spotty (at best) and the market environment itself has played havoc with pricing.  This is not easy.

Oct 25, 2009 03:38 AM #4
Rainer
86,308
Bob Murphy
Keller Williams Realty Consultants - New Albany, IN

Hi Jennifer - I never ask my clients what they think their home is worth until I tell them what I think it might bring in the market.  Both the marketed price and the final sale price.  My clients seem to like that.  They realize I am not just sucking up to them after hearing what they think.  So we start from what I think and work out from there.

Don't you imagine the appraiser will have the final say in what the home is worth.

I might suggest an appraisal as part of the listing strategy.

Oct 25, 2009 05:03 AM #5
Rainmaker
997,159
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

It's been years since having that type of challenge fall upon me.  If the home is more than 15 years old here, it's hstoric.  Tear it down and build another!  I'm stretching the truth a little, but not by much.  "Ahem", have fun. 

Oct 25, 2009 09:19 AM #6
Rainmaker
484,157
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Kevin - OUCH! Different markets, eh? In Denver, everyone wants the old stuff...

Bob - Actually, I've found that in my urban market, appraisers aren't as effective in determing the right price for market... but that's a can of worms I've opened before and be soundly scolded for my opinion on the matter.

Kent - those are tough. In my market, almost every urban home has some sort of location challenge - whether it's a neighbor or a boundary or whatever... that's what makes it so much fun (yeah, right).

Julia - Exactly - every "charming older home" is different and therefore, very difficult to objectively price. I'd love to create a Historic Home class - hmmmmm!?

Bill - Goodie!!!

Dorie - I'll honor a seller's opinion on pricing - that is - I'll take it into account - I find that the more you include the seller's input on pricing, the more cooperative he'll be in helping to price it right.

Oct 26, 2009 01:17 AM #7
Rainmaker
113,514
Florida Private Golf Communities
Golf Life Properties, LLC - Palm Beach Gardens, FL
Finding Home Never Felt Better!

Hi Jennifer!  I'm sure other agents appreciate your-ahem- help, lol...especially on something as tricky as pricing historic property.  In Baltimore we have beautiful, charming historic homes and literally from one block to the next huge fluctuations in value.  Still laughing at "Renovated with Pottery Barn Flair":)

Oct 26, 2009 06:19 AM #8
Rainmaker
1,007,362
June Piper-Brandon
Long & Foster Hampden - Baltimore, MD
Piecing Dreams One Home at a Time

Jennifer, in Baltimore we have a lot of historic homes, in fact, we are supposed to be the most visibly historic city in the United States.  It's incredibly difficult to price a home like that and even more difficult to get a good appraisal.  We listed a house once that was built in 1790 and I had a gut feel for price but couldn't substantiate it with comps or neighborhood appeal but I could justify it.  Interesting. 

Oct 29, 2009 11:55 PM #9
Ambassador
2,290,028
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Hi Jennifer,

I can't imagine it being a good idea to price a home without visiting the home even in a newer development... it may not have been taken care of or have terrible remodeling job on the inside.

When I price one, I gotta' inside the house before I toss any numbers out. :)

 

Oct 31, 2009 12:07 AM #10
Rainmaker
484,157
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Judi - Me, too. But I hear a lot agents say it isn't  necessary in "their market." I can't imagine, but I'll take their word for it (not really). I also won't even think about pricing a home until I know more about the seller's situation - their level of cooperation, willingness to show, etc. etc. etc.

Oct 31, 2009 12:14 AM #11
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Jennifer Allan-Hagedorn

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