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 the cleanliness, state of maintenance and function or usefulness of the space inside and outside the house. General cleanliness will lead to a sense that the house is cared for and that the house will make a habitable home in the future. It is simple – clean the rooms and remove unnecessary clutter. Open counter spaces in the kitchen give an impression of ample working space; clean showers and baths give the impression of sanitary and relaxed space. Dirty windows suggest that more work will be necessary to maintain them clean do not give the sense of more space or openness. Clutter and over furnishing imply a lack of space.
Painting the interior and exterior is one activity that in general, provides the best return on the materials and time invested. Choose colors that are light and warm since they will have a wide appeal and interest more potential buyers.
New towels and shower curtain will breath freshness into bathrooms; flowers in the garden and in a drab room will provide a greater sense of home rather than just a building. And strategically placed mirrors can elevate the sense of space in cramped spaces. These are all examples of how to help a home show better during the visit of potential buyer. Remember, by encouraging house hunters to see and buy into a dream, they will, in the process, buy the house.