Undoubtedly, one of the most important tasks a listing agent performs is the determination of the “probable selling price” of their seller’s home. Sellers mean well and I appreciate the fact many have done their homework and have somewhat of an idea as to what the listing price should be for their home. In fact, I will often ask the seller prior to coming out to their home to conduct the formal listing presentation, the listing price they’d like to set for their home. Why did they pick that price? Many times, their reason is “my house is the same as my neighbor’s house” and it sold for X amount.
HETEROGENOUS REAL ESTATE
The seller’s house may have been built at the same time as their neighbor’s, may have the exact same floor plan, identical upgrades & amenities, similar lot size, etc, etc.
However, real estate is heterogenous – no two properties are exactly alike. Each property is unique and therefore, even though two properties appear similar, one may have more value than the other based on where in the neighborhood the house is located. We call this situs value.
This is critical for the home seller to understand so they price their home appropriately. During the listing presentation I make sure to fully explain situs value as it pertains to properties that are comparable to the seller’s home.
During a recent listing presentation to a seller whose home was on the market for six months and left the market unsold (aka expired), the situs value explanation opened the seller’s eyes as to why the home didn’t sell.
Two of the comparable properties were located on the golf course and one of the two was down the street from the tennis courts. Yet the seller’s property was priced the same as those two properties. The seller’s home was overpriced by more than $30,000 and not only did it not sell, they had received zero offers.
We’re confident with the new price, the home will sell and the sellers can comfortably “turn a new page” in their lives.