Whether you’re a buyer or seller, knowing how a home is priced gives you a leg up in the world of Real Estate. Here’s how we break it down:
Where the home is located. This is the most obvious. The more in demand your location is, the more money you’ll get (or have to spend). Example: Tacoma’s Central Neighborhood vs South Tacoma. Although both areas are growing, people are willing to pay more to live in Central. (see image to the left)
What are your finishes? How is the paint? Do you have snazzy cupboards and countertops? Is there crown molding? Thick baseboards? Shiplap? Cosmetic condition refers, basically, how pretty is the home. Although this can be relative, presenting a clean, attractive pallet for people can really make them go crazy. Cosmetic DOES NOT affect quality of life.
There’s nothing quite like a buyer loving your soft close drawers only to find out from their inspector that the wiring, roof, & foundation haven’t been touched in 50 years– and dear god what do you mean it’s $30,000 to fix? Regardless of your opinion on the structural stability of homes, if a buyer feels like they aren’t safe, they won’t buy your home. It’s really a trust issue. Of course there is no perfect inspection report. Of course there things you didn’t even know would be issues. But if you have a bit of money to put into your home, forgo the granite counter tops and go for the new windows. Buyer’s are more likely to say “I have no problem putting in hardwoods, but I don’t want to deal with putting new beams in my foundation.”
Note: If your home has plenty of structural updates, but isn’t particularly sexy, staging can help with that.
Price: Putting it All Together
The price of your home needs to be supported by the location & condition. It’s really a simple A + B = C equation. If the condition of your home is GREAT but the location can only get so much money, then you have your price cap and you’re home will have to be the best of the best to secure that top dollar.
Buyers: If you’re a buyer who has only so much to spend (relatable) you’ll find it’s nearly impossible to have all 3 of these things. Either you condition, price, or location needs to be flexible. Don’t believe me? That’s understandable, but it’s nonetheless true. It’s important to have a Realtor who cares about finding the right home for you and not just telling you what you want to hear (some may disagree with me). Finding the right home for you means preparing you for the realities of the market. Your agent should care (a lot) about getting you the most for your money, but I promise you the rest of the market and seller’s don’t really care.
Sellers: Ignoring how location & condition justify pricing can really screw you over. If the honest price your home will get isn’t enough to make it worth selling– don’t sell. And don’t let the 30 cold calls from real estate agents convince you to. Here are some other posts to help with this:
Tacoma’s Funky Market, Being #1, & The Cost of Selling
Questions? Shoot us a message! We’re happy to hear from you.