Real Estate Catch Phrases….EXPOSED!
July 25, 2010
Ever hear folks say things that just make total sense when they say them…..but then you get to looking at it beyond face value and realize that it doesn’t always apply 100% of the time? Back when I was a kid, people around here would put bags of sand in their trunks for the winter. The logic was that it would add weight to the back of your car and help with traction in the snow. That is very true…..if you have a rear wheel drive car. I remember in the 80’s when front wheel drive was starting to become common. In the late fall you’d hear people with front wheel drive cars say it was time to get their sand bags.
Same thing happens with real estate. We’ve all heard some of the following thoughts that in general are true, but don’t really apply to all situations all of the time.
1) Location Location Location: While generally true, I’d like to see this one replaced with “Location, Price, Condition.” Why? I’ve seen too too many houses in a prime location sit on the market because the price and/or condition weren’t right. You just can’t price your house in a prime spot equal to others in your neighborhood if it isn’t an equal house.
2) You can get a good deal with a For Sale By Owner: I hope I am not offending anybody here, but in all the FSBO houses I have ever seen, all of them have been grossly over priced. Let’s face it, people go the FSBO route because they want to save themselves some money. For somebody who thinks they can pocket the commission savings, it is easy for them to think a buyer should also pay what they feel their house is worth…….But it is the buyer who always gets to determine the value of a house. You’d think seeing houses in some parts of the country go for 30% of their previous value would testify to that fact. That is why sellers usually end up listing with a realtor. The day sellers figure this out is the day you’ll start seeing a lot of realtors lined up to give plasma.
3) Go Neutral: I must admit, I generally tell people to paint bold rooms beige, and when they remodel, go neutral. The reason is that if 10 people come to your house when it is for sale, 10 people won’t be offended. However, 10 people probably won’t fall in love with it either. If you have something with some character and 10 people come in, 9 won’t like it at all, but that 1 that does will probably buy your house and give you top dollar. I have cherry floors and slate in the bathrooms. I polled my Facebook friends to see how they reacted to slate. About half loooooved it and half didn’t. Same thing with my friends. Some see it and want to touch it and keep looking at it. Then some give me a look like they are trying hard to not ask why I picked slate!
4) It’s better to have the cheapest house in an expensive neighborhood than get a nicer house in a cheaper neighborhood: This one can bite you on the bum. The problem is that the buyers who will be looking in the nicer area will probably expect more than the house has to offer. Also, buyers who will be looking in that price range may elect to get more house and skimp on the location. Going this route is best for somebody that plans on improving the house to the standard of the neighborhood since it gives them a better chance to recoup their money.
5) You’ll get your money back out of an improvement when you sell: I don’t hear this as much since the market slowed. Even when the market was super dooper hot, you never got 100% of what you spent back, and you certainly don’t today. Another thing to remember is anything you do to your house has a life span. The more of its useful life span you pass on to the buyer, the more you get back. A good example? Carpet. It only really adds value if it is new. Imagine if you saw a house for sale and it said “New Carpet in 2005!!!! Not gonna get your blood boiling is it?
6) You need wiggle room in your pricing so buyers can think they got a good deal: I just blogged about this one, so I won’t spend much time here. Think about this though…..Do you think pricing your house without wiggle room will get you more showings than the sellers who have their house overpriced? Buyers are online looking at houses they want to see in person. A realistic price makes your house stand out in comparison to the others and they come out to see it. You need showings to get an offer. I have never had a buyer tell me to make an offer on a house they haven’t been in.
That’s it for today and my “Deep Real Estate thoughts by John Rice.”