Earlier this week (or maybe last week?) I promised to do a little series with tips on how to properly price historic homes in urban markets. Here's where I promised that - you might want to read it first.
Got distracted by conversations ‘bout Real Estate Reality Shows, but here I am again, back to the more mundane issues of our daily grind... pricing homes to sell. Yawn. (I say that a little sarcastically; I totally love this stuff).
Pricing historic homes in urban markets is a bit (a lot?) more time-consuming than pricing newer homes in planned developments. But, at least to my way of thinking, it's a whole lot more fun! Hope you think so, too...
Step One is to Drive by the Home. Never, ever, ever begin the pricing process until you've at least driven by the subject property. You need to have an accurate mental picture of the home and its general location on the planet in order to take the next step. When you drive by, be sure to look for any locational challenges such as nearby railroad tracks, overhead high-tension power lines, undesirable neighbors (either commercial or residential) or obvious parking issues. If the home has an alley, drive through it to see what the back of the house overlooks.
Very few older urban homes are in a perfect location; almost all have some locational "amenity" that buyers will object to. You need to be aware of any such objections upfront. On the other hand, if the subject property IS in a perfect location, that's something you need to know as well, because most of the comparables you'll be using won't be.
While we're on the topic, it's far better if you can get inside the house before you prepare your CMA. I usually handle this by doing a 2-step listing presentation - the first being an information-gathering/rapport-building meeting and the second focusing on the current market - i.e. pricing. (Actually, I do a three-step listing presentation, but I'll talk about that later).
That said, whether you do a one-step, two-step or even three-step listing presentation, never meet face2face with a seller without first, driving by the house, and second, perusing the relevant market data online. You need to be at least conversational about the local market, even if you haven't done your detailed research yet. Remember, the general public thinks all we do all day is drive around and look at houses, so if you stutter, stammer and hedge when the seller asks you about his neighborhood's market activity during your first meeting, he'll certainly doubt your professionalism and expertise. Being able to casually toss out a few neighborhood statistics or hyper-local market factoids will do wonders for your confidence and credibility.
If there are any homes for sale or any that have recently sold within one block of the seller's home, know the details of the listings or sales, even if they aren't comparable. Your seller knows all about them and he'll expect you to as well.
Homeowners in urban markets tend to be pretty enamored with their neighborhood and will expect their real estate agent to be, too. So, be as prepared as you can, as early as you can.