March 8, 2011
If you've been following my recent blog posts (or lack thereof) you know that I'm in the process of finishing up a property that I own and now it's time to put it on the market. Before I do that I need to come up with a price. Boy, what a struggle that is.
If you're a homeowner and you are reading this, take heart even this real estate professional is struggling with setting a price for her own property, if you're a Realtor® maybe you can relate, or offer some advice.
Here's the situation. The home is a 2 bedroom 1 bath home built circa 1910, it sits on a one acre lot. The home has been literally been rebuilt from the ground up, the foundation has been reinforced, sheet rock replaced, all new electrical to support the new central heat and central air, new plumbing including a new indoor laundry room, new tub & toilet, and new pex lines to support the reconfiguration. The entire house has also been remodeled, the floor plan was opened up so the living room, dining room and kitchen all flow into each other. There are pine floors throughout, except for the bathroom and laundry room which have ceramic tile. The kitchen has all new cabinets, granite tile counter tops, and sports a stainless steel dishwasher, stove, and vent hood. There is a new 200 SF covered porch off the front of the house and a small 80 foot porch off the kitchen to support a barbecue.
I'm telling you all of this to give you a feel for the difficulty in setting a price. Most of the historic homes in my area are on small 1/10 of an acre city lots. Many of these are foreclosures that have seen better days. The houses on one acre lots tend to be newer and have the ever popular 3 bedrooms and 2 baths, which my property doesn't. Many of these homes are in more marginal neighborhoods, and many also need work.
Prices for these types of properties currently on the market range from $65 to $125 a square foot, sold prices have ranged from $50 to $100 a square foot.
I have two dilemmas, the first, who wants to buy my house? Is it a lover of traditional architecture who wants the charm of an older home? Or is it someone who wants low maintenance, privacy and some land around them? My second dilemma is do I price it lower than I think it's worth to hopefully generate interest and possibly a bidding war, or do I price it fairly, leaving a little room for the buyer to negotiate and to offer incentives like a matching refrigerator?
All of you homeowners out there, take note of one very important fact, throughout this entire conversation there has been no mention of how much money I've put into the house, how much I owe, or how much I must net to move onto my next project. That is truly irrelevant. The house is worth what the market says its worth not what I want the house to be worth or need the house to be worth.
After weighing all the variables, I've decided to list the house at about $107,000 or $97 a square foot. But I'll be questioning my decision until it sells. And believe me, if I'm not generating any interest, I foresee revisiting my pricing strategy in the very near future.
Tamara
PS This is not a photo I will be using in my MLS listing, it was just the most convenient photo I had for illustration purposes, I'm fanatical about my MLS photos and this doesn't make the cut.
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