Kristin Shanahan | The Locker Room Northeast National Director

What determines the TRUE value of a home?

Placing a home where it belongs in the market is the key to a smooth sale. As real estate professionals, we like to consider ourselves experts in the market, right? Whether it is a small, niche market or a vast market full of varying home styles, one thing that we can hang our hat on is the fact that regardless of the market that we sell in, we have to provide our clients with enough expertise to position their home appropriately, (aka price it right,) and provide guidance that will ultimately lead to an overall smooth transaction.

Fact: We know that we need to focus on the comparative sales in the area when pricing a home.

Fact: We canNOT take into consideration: a) how much money the seller has spent on improvements or b) how much money it would cost to build this exact home.

Fact: A mortgage payoff and/or amount of money that a seller would like to receive in order to fulfill various obligations should not be taken into consideration when pricing a home, or when helping a buyer make an offer on a home.

The value of a home comes most directly from the price per sq ft of the homes that have sold recently in the exact market that this home sits in. As trustworthy, professional agents, it is necessary to take into consideration certain factors such as whether or not the home has been updated (granite vs formica, and hardwood vs vinyl), and where the home is located (railroad track views offer a different perspective than waterfront views) and to be honest with our clients about these factors and how they affect the value of the home, without being discriminatory (some buyers may actually love a good railroad track and have been looking for just that) while expressing our opinions of the value.

If you’re representing the sellers-there are some good strategies for increasing the value of the home simply based on first impressions-is the temperature of the home being regulated? When a buyer is viewing a home, they need to see themselves living there, if they are too hot or too cold, this may subliminally eliminate the home for them. Is there enough light coming into the windows? Are there weeds taking over the landscaping as they walk to the front door? Sometimes we need to encourage our sellers to take an extra step to enhance the curb appeal and comfortability of the home. Remember that your clients are emotionally attached or emotionally unattached to the home, and this ultimately affects their decision making skills when it comes to the ability to appropriately price the home. This is why they are talking to you.So. Is there a magic strategy for pricing a home? No. Is there a definitive way to be an expert in your market? Yes. Study the recent sales. Be honest with your clients about the conditions of the home that you’re standing in, and the way that those conditions affect the value of the home. And with those two simple steps, your reputation as the local expert will grow, and success is yours for the taking!