Last week, I had a friend of mine ask me if I could take a look at her parents’ house. The idea was to come up with some sort of value for the home. While this is something I do daily, it wasn’t routine for my friend. Before we even got to the house, she explained that the house was going to be a mess. There were no updates, and her family wanted to be done with the house.
The house was in South City, across from Ellendale. When I arrived at the house, the storm door was closed but the front door was open. I knocked on the door but then noticed that there were panes of glass missing from the storm door so I just said, “Hello?”
It might be surprising for you but when you walk through some homes it’s like walking back in time. I don’t know what it is, but homeowners tend to go with one decade and then never move out of that decade. So, when you walk in, the first task is figuring out what decade you are working with. From the looks of this house…the wall to wall paneling, the drop ceilings, etc, it looked like we were working with a home in from the 60’s. That meant that very little had been done since then.
Sale Price Of This Home
The question before us was what this home would possibly bring in today’s marketplace. At Deerwood Realty, we list all homes for sale. Not all of them are winners. This gives us experience in coming up with a price for homes such as this one. There’s two lines of thought from a home seller usually in this particular instance.
If I were a buyer, I would not buy this house at any price. This is the most common thought, and it effects the value the seller is willing to take for the home. Because the home seller thinks the house is worth nothing, any price above zero is great for them. Why is this a problem? This opens the door to the neighborhood real estate home investor. I went over these folks in an earlier post. The bottom line is that the real estate investor is looking to make the maximum profit. By the seller’s disposition of the home having no value, it makes it super easy for the investor to take a great shot at a number that is way off of what the open market would bring.
The other line of thought goes something like this.
My family has owned this house for generations, and by that fact it is priceless. The idea is that because you’ve made memories in the home and that the home is priceless is really problematic when the time comes to sell. That house next door that has been completely remodeled and went for 250,000? Yeah, that’s a start, but because this is your house, it must be worth 300,000 in its current condition.
Can you see the problem with both of these lines of thinking? The house isn’t worth zero, and it isn’t possibly going to bring more than a home that is in the right decade. This is where I find myself as a real estate broker in St. Louis all of the time. If I tell the seller in the 2nd line of thought that their house is not worth their assigned price, I lose the listing and offend the seller in the process. If I tell the seller in the 1st line of thought that their house is worth something, I’m met with disbelief! The seller will actually go to great lengths to tell me I am an idiot for thinking the value is more than 0!
Getting to know your client
You can see the dilemma. I want to do the best thing for all of my real estate clients. And this is where I’ve tried to make the case that Deerwood Realty is different. We make an effort to get to know our clients. If we walk into a listing situation with no understanding of our clients, how could they possibly trust us? Their minds on value are made up before we even physically see the house. If we have some level of trust, we have the ability to discuss home values without having to worry about offending our clients and we can provide the best level of service. This is key.
Looking At Home Values
Homebuyers and home sellers have different mindsets. Within these two categories, it gets even more murky than that. As an example, one homebuyer might want to fix up a home over time using “sweat equity”. Another homebuyer might want to buy something that needs no repairs or updates and is move in ready. When marketing homes for sale, we need to be cognizant of who our market is. This is why home values can be difficult and where a lot of real estate agents who list homes for sale miss. Setting a price on the high end of the scale is useless if the home needs work.
Setting A Value For This Home
I’ve explained how we commonly arrive at values for homes here in St. Louis. We look at what has sold. We look at the work needed to bring the home to a level and then come up with a price that will work in the current marketplace. When I told my friend what her home was worth, she was shocked at what a buyer might pay for her home. It certainly wasn’t 0, and she wasn’t going to have to pay someone to take it. Had she just called some random home investor, her family wasn’t going to get anywhere near what they should have.
You need an experienced real estate agent to get you top dollar on your home. But you also need an experienced agent to keep you from making an awful decision on pricing your home for sale. In today’s world of instant communication and instant information, we can be overwhelmed when it comes to selling our homes. That doesn’t have to be the case. When you go to list your home for sale, give us a call at Deerwood Realty. There’s no obligation for us to come out and come up with a home valuation that you can be comfortable with.