Here’s a common, often unspoken, home seller creed that is an underlying motivator when selling a home: “I hold this truth to be self-evident that my home is not created equal, that it is endowed by it’s owner with certain unalienable features, that among those are wonderful upgrades, great location, and most importantly a high price.” What does it take to get a seller to not act on this creed during the marketing of their home? Here are a few self-evident truths about home sales derived from that creed that always seem to stump sellers.
Perceived value does not equal instant value. Some sellers keep a detailed list of home improvements they’ve added over the years with the expectation that the price paid for the item will add an instant dollar per dollar value to the home. A $50,000 pool added yesterday does not automatically mean an appraiser will give an extra $50,000 value to the home. Spending $15,000 on that beautiful kitchen remodel does not mean the home is now worth $15,000 more. However, kitchen and bathroom upgrades do have a very high appeal to buyers. In the end, appraisers are going to give the most value to like-kind features within the living space of the home. Yes, home upgrades, pools, solar systems do add value. But it all depends upon what other similar homes in the neighborhood are also selling for.
Markets never remain the same, they shift. Housing markets are always in flux. What the Jones’ sold their home for across the block six months ago may have no bearing on how buyers are viewing a home in the present. Realtors possess data that displays what happened in the past months with sales and values; however, how buyers may react to the present or future inventory is totally based upon speculation. It doesn’t matter what the Jones’ home sold for in the past. Home prices and the movement of buyers jumping to purchase can shift daily. A home’s price five years ago, or even three months ago, can sometimes have no relation to what a home is valued at today.
Sellers may sing, but buyers are king. Some sellers boldly vocalize about the value of their home. It’s common practice to check today’s evaluation on Zillow. Realtors are requested to produce market analyses to verify. Appraisers are then hired to determine “a true value”. No matter what Zillow, realtors, or appraisers may state, a home’s value is only worth what an able buyer is willing to pay. Appraisers do their professional best to estimate a home’s value, but this basic fact remains: sellers must connect with a buyer who determines the negotiated price ‘correct’ if the home is to ever sell. Sellers who miss this truth wind up with a home that will not sell no matter how big or beautiful the upgrades may be.
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