#559 in a series of true experiences in real estate
August 2008, Hills Newspapers
We usually know within a few minutes of first walking through a house approximately what it will sell for. Sometimes we have a good idea even before we see the inside. But then we want to be sure we’re right.
When someone calls to say he wants to sell, the first thing we do is look up the tax assessor’s record which fairly accurately gives the year the house was built and the size of the house and land. We are already familiar with the neighborhood, have gone into other houses nearby, and so, likely we can guess what the demand there will be. And from the age of the house, we have at least an inkling of what it looks like before we get there.
When we visit in person we look at the route to the house, the neighborhood and block and the outside of the house. Inside we walk through all of the rooms and the basement and out into the yards. We note the looks and age of the roof, electrical panel, furnace, etc. By then we know quite a bit.
Maybe we began by thinking broadly – “it’s probably worth in the high sixes or low sevens”. But we’re getting more specific now – “it might be as much as $725,000, depending on what gets fixed” – although we’re not yet ready to declare it.
A house we will be listing soon is older, built in the 1930s, appears solid and well cared for. It is big for a 3-bedroom and has a large lot. There are many pretty wood features that will be appealing to many people. Fairly expensive, clean and attractive neighborhood. Plus rooms and a garage and lots of closets. Furnace and roof are probably due for replacement and the kitchen is original. Although we find the cabinetry wonderful and would want to keep it if it were our own kitchen, someone else might replace it all, add a dishwasher, perhaps expand into the breakfast room.
We have been searching MLS for sales in the neighborhood. How quickly are listings going into contract? Which agents are selling them and at what prices? We go to see nearby houses that are offered currently, and there are quite a few. We see a dozen houses, many about the same size and vintage as ours with asking prices in the mid-sevens to mid-eights.
We find they’re priced this high – and many are going into contract with buyers in a week – because they’ve been updated with new kitchens and baths. Most have up-to-date roofs, electrical, heat, and so forth. The landscaping is mature and the cosmetics are good.
The all-over physical inspection at our house goes well, no disappointments. In fact, we get some good news. The foundation is good – no cracks or leaning – and although a few windows will no doubt be on the termite report, the porches are in pretty solid shape. If we have some minor repairs done now, we might keep the porches off the termite report.
We schedule our best people to give us bids for replacing various systems, but we already know from past experience approximately what these bids will be, and we are more confident now that our pricing guesses are right.
A house comes on MLS at $630,000 and the exterior photos look great. That shakes us up. Why would it be so low? We run out to see it and are glad to find the house is good on the outside but poorly expanded and partially remodeled inside. Plus the house hasn’t been cleaned, the floors slope every which way and, importantly, there is no place to sit down and think.
We’re still safe. We’re considering finer points now. Should we change the curtains? How much staging should be done and how will individual rooms be photographed? We’re thinking about the wisdom of having a new furnace installed, even talking of more extreme measures. How crazy would it be to plant an orchard in the big, full-sun, largely-empty backyard? Would an orchard be a selling point? Or will the new owner plant a lawn for his kids, add a run for his dog?
Probably the most important factor in marketing is figuring who the buyer will be. We obsess about this. It isn’t going to be the busy couple willing to pay extra for an all-done house. Our house, with its old kitchen and blank garden, won’t be their choice.
More likely in this case the would-be buyer will fall in love with the extensive charms this house holds, someone who finds the neighborhood lovely and quiet, who is willing, even eager, to remodel the kitchen. Yes, this seems more like it. This is a house that someone will stay in for a lifetime.
We’re still about a month from putting the house on the market. We will continue to think, refine and confirm our pricing right up until our flyer goes to the printer and our first ads are placed. Our goal is to price and market the house so that agents and their buyers for whom this house is perfect will see it in the first few days and will feel some urgency to make it their own.
