Why hasn't my home sold?

From the Series: "Home Construction & Maintenance in Mexico"

By J. Brad Grieve, P.Eng. MBA Copyright© 2006
His Web Site

An important factor is the condition of the house. This relates back to the general appearance of the home and those important first impressions.

With this month's edition I want to touch on some issues that are somewhat maintenance-related however they come up during the process of selling a home. As a real estate consultant, I have consulted with some clients as to why their house has not sold or what can they do to maximize the return on the sale of their home.

The most common problem is price-related. They have entered the market with their property overpriced compared to similar properties that have sold or are presently on the market. An in-depth Comparative Market Analysis (CMA) that reviews four aspects of the value of the property: Replacement Value, Return on Investment (ROI), comparison to similar properties sold and comparison to similar properties presently on the market, help them to see clearly and decide wisely regarding the fair market value of their home.

The most common method used by many local realtors is the calculation of the replacement value by analyzing the amount of land and construction and applying a cost to replace or rebuild the same property. Simple rules of thumb have been used by many local realtors to estimate the replacement value of various elements of the property such as the cost of land, cost of construction, extra amenities and chattels.

Sometimes they will apply a depreciation value to the construction or adjust the value of the land due to location, grade, size, services available and other factors such as view. Depreciation on the construction is to account for the elements the assessor cannot see such as, foundations, structure, electrical and plumbing systems. Traditionally, depreciation is applied assuming the lifespan of a home will be 100 years, however the reality is that the accepted lifespan of a home in most of the world is only 60 years. Therefore, the depreciation of a 20-year-old home is more like 33% rather than only 20%, depending on the state of maintenance of the house.

Another aspect in a hot market is to factor up a property value due to rising prices for similar properties in the market. Sometimes this factor is applied liberally to satisfy a seller who has the simple objective of selling his or her home for the highest amount possible. This may get the realtor the listing, but will set the seller up for potential disappointment when the length of time on the market becomes prolonged or offers come in lower than expected. Realtors often use the adage that "there is a buyer for every home," however, it is important to include the phrase "at the buyer's price."

Another important factor is the condition of the house. This relates back to the general appearance of the home and those important first impressions.

First impressions relate to. . .

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