Real Estate!!! Do Your Research!! (big house, to buy, gated)
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You make really good points. I love how some of the sellers in my area think that adding that granite countertop will add another 10k to the price of their house. If the buyer likes it, they like it, with or without the countertop.
It is a free market and a you're right, a house is only worth what someone is willing to pay.
I'm not sure how everyone else feels, but I know as a buyer, I don't care if every room has fresh paint, because I know I'm going to change it anyway. Doesn't bother me a bit and a lot of the people I talk to say the same thing.
I have to wonder, how much difference does it really make to do all the upgrades? If homes in a particular neighborhood are going for x amount, will upgrading put you above that amount? I just don't think so.
This being asked, keep in mind that I completely remodeled my entire house within the past 18 months. I'm just not willing to do any more. I need to save to be able to make my next one mine.
I got the answer to this at least. Sometimes it does. I know coming from an old wreck where we did nothing basically , when we hit over 40 we did not want to go into another old wreck at any price. I would have rather paid more to already have it done, if it was done correctly and to my taste!!! Now the people who bought my old wreck were first time home buyers, young and ambitious!! So to me spending more money did not matter, I was tired of renovations and contractors and dealing with towns/permits and the great new high tax bill!!! I was thrilled to walk into a house all done top to bottom and yes I paid more, but I dont have to deal with any of that and thats what I wanted considering where I came from (dump).
"Well, Mr. & Mrs. potential buyer, the seller feels he's got it priced right. And as you know, my job is to represent the seller. As to what he might accept or not accept, the only way to be sure is to put an offer in writing. Do you have an agent you'd like to represent you on this, or would you like me to just help you get an offer in writing to the seller."
hey Bill - say the agent at the open house isn't the listing agent (which happens a lot) - are they obligated to represent the seller and not disclose how they feel?
I'd like to explore this further. So if you'll play, I'd appreciate it.
The seller & agent go through the facts & info, they review the market, they factor in the best comps, and come up with a price. Agent markets the property for 20 days, to a good deal of traffic, but, alas, no offers.
The agent & the owner sit down, review all the data, including the few homes that have sold & gone under contract since they listed. The agent says, "It seems clear that the market has continued to drop, and we need to get in front of it if we want to sell. I recommend dropping the list price from $685k to $650k."
"Not yet" says the seller. "I think we ought to go a full 30 days at this price, to see if we can't get it. I know it's worth it. If we can't get an offer in another 10 days, then we'll talk about dropping the price."
After trying for 15 minutes to convince the seller that dropping the price now is the better strategy, that the market is falling ahead of them and that it's better to do it quickly lest they have to do it more when they finally do it, the agent resigns himself to 10 more days at this price.
This is on a Wednesday. There's an open house scheduled for Sunday. Yes, we'll stay with that marketing plan, hold the open house.
The agent puts ads in the paper and on the internet, makes sure it's listed in the MLS & Realtor.com open house listings, does all the things he needs to do to create the perfect open house atmosphere. Half an hour into the open house, a couple stolls in. Sure we'll sign in. Thanks for this info sheet, yes, I see the Consumer Information Statement disclosing how real estate relationships work. Show us the house please. Yes, nice layout, good room sizes, gee I wish it had granite counter tops . "Hmm," says Mr. Potential Buyer, "It's nice & all, but geeze, it's overpriced by at least $30k , and probably more like $50k, for the current buyers market, don't you think?"
So, you want the agent to respond how?
Well, despite the fact that there's a lot of verbiage there, we're not really given enough information in this example about what the agent believes relevant to the buyer's question.
First, just to repeat generally, I want the agent to respond honestly, which means reporting what they actually believe versus something they do not believe, and that includes not avoiding questions (or reframing them as if they were answering a (even slightly) different question instead) to avoid reporting what they actually believe.
If the agent suggested lowering the price because the agent does not believe that the house is worth 685k but 650k (we know from the example that the seller believes, "I know it's worth it", but not whether the agent agrees or has an opinion on that), then the agent should report that they agree with the prospective buyer's opinion. Of course they can say, "However, the seller believes that . . .".
If, on the other hand, the agent agrees that for whatever reasons, "I know it's worth it (685k)", and was only suggesting the lower price as more of a lowballing move to sell the property asap, then again, the agent should report what they believe, and explain to the prospective buyer (again, assuming they believe all this) that while they know that similar properties are listed that much less, the agent believes that it's really worth the asking price because of (whatever the reasons are that they happen to actually believe this). In fact, it would be worthwhile in this situation to give even more info--"You know, I said the same thing to the seller when we were setting the price, but he pointed out that he believes it's really worth the higher price because of x, y and z, and I agree", as long as that actually reflects the agent's beliefs.
This doesn't at all exhaust the things that the agent might believe. For example, if I were the agent. I have a belief that there is no "real value" in the sense of x being worth n, where people can somehow be wrong about what x is "really worth". If I were the agent in this situation, I would say something like "The value of something to someone is whatever a person believes it is worth. I think that the value of real estate is whatever a buyer and seller agree is a fair price for it. The seller and I are aware that there are similar properties are listed on the market for around 650k, but the seller values his property at more than that because of x, y and z." (And hopefully for the seller's sake, x, y and z are characteristics that the similar properties do not have.)
What would definitely be the dishonest answer would be to have an agent who doesn't believe that the property is worth 685, yet who tries to persuade the prospective buyer that the agent believes that it is really worth that because of some set of reasons (like whatever the seller's reasoning was). An agent who is dishonest in this way might end up talking the buyer into putting in an offer for the house at the higher price (although that's probably unlikely, so why bother with the dishonesty anyway), but I certainly do not agree that doing this from a stance of dishonesty is a good thing. In the case where the agent says that they agree with the buyer, but the seller believes . . ., then that buyer is very unlikely to put in an offer for the higher amount, but maybe they'll put in an offer for the lower amount, and then the seller can reject that offer if they wish, while hoping that a buyer comes along who agrees with the seller that contra the going rate for similar properties, this one is worth more.
I got the answer to this at least. Sometimes it does. I know coming from an old wreck where we did nothing basically , when we hit over 40 we did not want to go into another old wreck at any price. I would have rather paid more to already have it done, if it was done correctly and to my taste!!! Now the people who bought my old wreck were first time home buyers, young and ambitious!! So to me spending more money did not matter, I was tired of renovations and contractors and dealing with towns/permits and the great new high tax bill!!! I was thrilled to walk into a house all done top to bottom and yes I paid more, but I dont have to deal with any of that and thats what I wanted considering where I came from (dump).
Ok, did you pay more than the other homes in that area were going for? Just trying to see if it's even worth my going through the laundry list of what we did do to this place when advertising.
You make really good points. I love how some of the sellers in my area think that adding that granite countertop will add another 10k to the price of their house. If the buyer likes it, they like it, with or without the countertop.
My wife has been hesitant on properties because of things like this. There was one house that I liked a lot for various reasons, but she was unhappy with the kicthen, including the countertops, and would only consider that house for what seemed to me a ridiculously lower price than the asking price (so much lower that you could have built a couple completely new kitchens for the amount).
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I'm not sure how everyone else feels, but I know as a buyer, I don't care if every room has fresh paint, because I know I'm going to change it anyway. Doesn't bother me a bit and a lot of the people I talk to say the same thing.
I agree with you, but my wife doesn't. While she knows we can change that kind of stuff, what a house looks like cosmetically now makes a huge difference in whether she finds a house attractive or is immediately turned off to it when we enter (or even before we do--and quite a few times we haven't gotten past seeing the front of a home from the street). What I care about is layout, space, construction, architecture, etc. I pay almost no attention to the cosmetic stuff (unless it's something odd that I particularly like and wouldn't have thought of myself--and the things I like are usually something odd; I hate "neutral colors", etc.--I understand why someone would have them especially to sell a house, but I don't want any "neutral colors" in my house, I want it to look more like a tornado hit a circus, right next door to a flower shop).
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I have to wonder, how much difference does it really make to do all the upgrades? If homes in a particular neighborhood are going for x amount, will upgrading put you above that amount?
So it really depends on the prospective buyer. If you get someone like me, then it's going to work against you to spend too much on upgrades--you'll want to raise your price significantly for them (maybe 2x or so whatever the upgrades cost), and I'm not going to think that those differences justify the price difference. However, if you get a prospective buyer like my wife (well, and my mom is like this too), then the upgrades are probably going to be worth the money (as long as you didn't spend a lot on some ridiculously exotic material that most folks aren't going to recognize as being very expensive). You should probably shoot for a happy medium with most houses. Enough "upgrades" that someone doesn't walk into the house and think, "Crap, I've got to change that, and that, and that . . ."--which would turn me off too, as I don't want something that's effectively a handyman special, but not so many upgrades, or of a type, that you're going to have to raise your price very much over competitor properties.
My wife has been hesitant on properties because of things like this. There was one house that I liked a lot for various reasons, but she was unhappy with the kicthen, including the countertops, and would only consider that house for what seemed to me a ridiculously lower price than the asking price (so much lower that you could have built a couple completely new kitchens for the amount).I agree with you, but my wife doesn't. While she knows we can change that kind of stuff, what a house looks like cosmetically now makes a huge difference in whether she finds a house attractive or is immediately turned off to it when we enter (or even before we do--and quite a few times we haven't gotten past seeing the front of a home from the street). What I care about is layout, space, construction, architecture, etc. I pay almost no attention to the cosmetic stuff (unless it's something odd that I particularly like and wouldn't have thought of myself).So it really depends on the prospective buyer. If you get someone like me, then it's going to work against you to spend too much on upgrades--you'll want to raise your price significantly for them (maybe 2x or so whatever the upgrades cost), and I'm not going to think that those differences justify the price difference. However, if you get a prospective buyer like my wife (well, and my mom is like this too), then the upgrades are probably going to be worth the money (as long as you didn't spend a lot on some ridiculously exotic material that most folks aren't going to recognize as being very expensive). You should probably shoot for a happy medium with most houses. Enough "upgrades" that someone doesn't walk into the house and think, "Crap, I've got to change that, and that, and that . . ."--which would turn me off too, as I don't want something that's effectively a handyman special, but not so many upgrades, or of a type, that you're going to have to raise your price very much over competitor properties.
Ok, you've definitely answered my questions. I'm not going to spend the money on the countertop (for example). What we have is just fine, considering that there is nothing else to do. Someone may want to paint their own colors, but that's not my worry.
I just would have a hard time spending thousands on something like a granite countertop to just get the same amount I am asking now. We have done absolutely everything else. There are no big items to worry about in the near future (minimum 10 years).
My husband is a lot like your mindset, doesn't even look at the cosmetic stuff. For me, the cosmetics are a bonus. I care more about the big ticket items. Heating, roof, etc. BUT, the one thing that will make me say no to a house is if there is no dishwasher. Go figure.
I know it's a dumb point, but just gets me every time.
Ok, did you pay more than the other homes in that area were going for? Just trying to see if it's even worth my going through the laundry list of what we did do to this place when advertising.
Yes I did pay more, I honestly feel for having everything fixed up. But your not just talking granite and stainless. I would not have paid too much more for that. What I paid more for was as follows: The whole house was redone from foundation up. I mean they put on a whole second floor, so here is the list I paid more for: New electrical, new plumbin, new roof, new a/c and furnace, new windows, new walls, new garage, new both bathrooms and kitchen, new tile and hardwood thru house and the top floor was all brand new. SO thats a big list, I mean a/c , plumbing, windows, furance and elelctrical and roof I mean that was worth it alone to hell with stainless appliances thats cheap! Whole house has brand new central air, not junk either this guy did not go cheap I mean he went with the high end stuff too, like a carrier a/c and anderson and not just crappy home depot lowest grade.
However we did look at house that were similiar in price to this home!! But those people were totally unrealistic in price.
I would not go crazy fixing up your home, I sold a wreck to first time home buyers and lowered the price alittle. Its alot of work to do all what this guy did to this house. I mean he went HGTV crazy and then got married to a women 8 months later and she wanted to be closer to MOMMY, so I think he planned on staying . He did not walk away with too much more than all the work he put into it.
Just make it neat , clean and presentable and a good fair price. I cant image doing all that this guy did and then go sell it for marriage !!!! I would fix up alittle but not High end like this guy. I mean the lighting and cabinets alone he put in were a fortune. He really went over the top, but he thought he was going to stay.
Fix whats broken, do a little updating but not over the top please. Look at the mls and see whats going on in others. I see houses that are alot of money and not as top of the line as this little home I got. I mean they are bigger, but no means better. This house I am in now is only 1400 square feet but he did a top notch quality job and I am only 2 people here.
So is it worth it, alittle but not over the top!!!! Stay within a good budget to make it look nice, but dont go crazy!!
After you have an old wreck you know just where to look, first room is the basement!!!!!!!!!!
Ok, you've definitely answered my questions. I'm not going to spend the money on the countertop (for example). What we have is just fine, considering that there is nothing else to do. Someone may want to paint their own colors, but that's not my worry.
I just would have a hard time spending thousands on something like a granite countertop to just get the same amount I am asking now. We have done absolutely everything else. There are no big items to worry about in the near future (minimum 10 years).
My husband is a lot like your mindset, doesn't even look at the cosmetic stuff. For me, the cosmetics are a bonus. I care more about the big ticket items. Heating, roof, etc. BUT, the one thing that will make me say no to a house is if there is no dishwasher. Go figure.
I know it's a dumb point, but just gets me every time.
I agree dont go crazy!! I just happen to luck out and I did pay a little more like I said but not for what this guy put into it!!! So he did not walk away any better. So its not worth it. Neat and clean and uncluttered are more important!!
BUT, the one thing that will make me say no to a house is if there is no dishwasher. Go figure.
I know it's a dumb point, but just gets me every time.
Right, each buyer is unique. I'm kinda like you with the dishwasher if the house has a basement but only one or two electrical outlets in the basement, OR only one electrical outlet in the garage (I'd like more than two, but never expect to find that). And being a musician (one of the reasons for the desire for electrical outlets) and visual artist, one of the first things I always check for is how space/layout would work for setting up a practice space, recording gear, whether there would be a good space for giving private lessons, where my easels would go, what the light is like for painting, whether the prospective art room has good ventilation, etc. Whereas my wife first checks out the kitchen, makes sure that there would be a nice guest room, and then makes sure that my music and art stuff could be effectively out of the way, lol.
Fix whats broken, do a little updating but not over the top please. Look at the mls and see whats going on in others. I see houses that are alot of money and not as top of the line as this little home I got. I mean they are bigger, but no means better. This house I am in now is only 1400 square feet but he did a top notch quality job and I am only 2 people here.
For me, though, although I could maybe appreciate the quality of the smaller house, I'd go with the bigger house that's not as fancy, because I need the space. I've had space problems for most of my life, and maybe because of that, I'd never think that a house was too big (I wouldn't even think that a palace or a castle were too big, lol), but I frequently think they're too small. Unfortunately, my wallet sometimes thinks houses are too big.
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. "Hmm," says Mr. Potential Buyer, "It's nice & all, but geeze, it's overpriced by at least $30k , and probably more like $50k, for the current buyers market, don't you think?"
Go figure.
