Friday, May 18, 2012

Houses aren't hamburger!

I've often said this when I'm helping people buy or sell a house - don't look at the square foot price and think it's the final answer on what a home is "worth". Alot of factor go in to what your home will sell for, or what you should be paying for a home.

First of all, it's the APPEAL. How did that property make you feel when you walked in the front door? Does the home have a feeling of calm, of good workmanship, good colors, layout and has the house been loved? I go into homes every day where I feel like running out the front door as fast as I walked in. The home hasn't been taken care of, or the carpet is soiled, stains on the walls, laundry on the floor - or no landscaping. It smells. If it makes me feel bad, it is certainly going to make a buyer feel bad. As a seller, you must do work on your home to make it feel good to a buyer. It must feel loved.

As a home buyer, don't just look at the price per square foot on a home and think that because the neighbor's house is priced $10.00 per square foot less, that this is a reason for making an offer $10.00 per square foot less..and I say this with confidence. I just finished consulting with an appraiser, and he said that the price per square foot of a house is not as relevant as you think. He confirmed that when he goes into a house, and his first impression is 'wow, nice', that feeling stays with him as he is assessing the value of the home. The amount of 'wow' that he experiences has a direct influence on his valuation model, as it should. If this wasn't true, then how can 4 tract homes on the same street, with the same floorplan, and priced differently not all sell at exactly the same time and for the same price? It's because one of them stands out - and if it's not just bought by the principle of what I call the 'bargain trigger' (the home is just so low priced that the above factors are overlooked), one home wins out because it just has an amazing appeal.

Sometimes it's landscaping - bringing the outdoors "in" as living space. This can be done by having outdoor flooring that is like indoor flooring; beautiful patio furniture, fresh flowers, and sometimes even a ceiling fan or outdoor music. Sometimes it's by having one or two custom lighting fixtures, or exceptionally upgraded countertops. I recently saw a home that was a simple, inexpensive tract home that sold because the owners had installed a high-end Wolf range in the kitchen along with other high end appliances. It was the 'wow' of the home that made it exceptional.

I recently brought a buyer to a 'wow' home. When we looked at the immediate area, the homes were priced all over the place in price per square foot, and had various floorplans. This home, which had been lived in by these owners for over 30 years, was a 1940's bungalow that had a wow factor even though they had not updated the home. In fact, that was the appeal. It was vintage, and sparkling clean. The wood floors had been refinished and the original cabinets were like antique treasures. The grounds were exceptional, with fruit trees, plants and gardens that knocked your socks off. When she saw the home, she knew she had to have it. It was priced reasonably, but high if you looked at it with the "arm chair appraiser approach". The actual appraisal came in higher than the purchase price.

I also just listed an amazing home that gave me a 'wow' when I walked in the door. It was clear that the owner had loved her home, and had taken exquisite care of it. The colors were warm and soft, her furnishings were superb. The neighborhood was an average, tract home neighborhood in a modestly priced area. Nothing exceptional about the location. But when you walked into that home, and through the back door, the wow didn't stop. The back yard was beautifully landscaped and the views were great. The patio furniture was perfect. The whole of the experience was exactly as you would want every listing to be. We priced it at the high end and sold it in 2 weeks for full price. The buyer said 'wow' and had to have it.

Houses aren't hamburger.

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