Home Price | Home Condition | Home Location or Terms
Home Price | Home Condition | Home Location or Terms
Recently I had to advise a seller why his 1977 Kissimmee home which he totally remodeled inside with granite, crown molding, tile and top of the line appliances hasn’t sold based on his current listing price. The outside was very dated, no landscaping, out of date, dated color and no curb appeal.
This is not the actual house but one very similar in his Kissimmee subdivision, but a bit nicer than the subject home in Kissimmee,Florida.
Here is what else was selling in the price range and not in his Kissimmee subdivision but in his Kissimmee zip code.
He was very upset and after seeing the Market Analysis and sent me the following reply.
“From looking at these pictures with prices, sq ft and other comps including asking price, If our house was truly being compared to these house, why would I want to offer a better house at less money?”
So in order to answer his question here was my response.
John,
What I am hearing you say is you still think your home is worth more compared to these. If I am reading you correctly your Kissimmee home may well be worth more the question is will someone be willing to pay more?
You have made some great improvements but perhaps over improved for the average price range of this Kissimmee neighborhood and current market conditions. Doing this is fine if you are going to stay put and live out your days in your dream home, but when it comes to selling buyers are going to see all the choices in the price range and will have many more options.
There are 736 available properties in 32825. 26 with similiar features to yours.
People looking in the higher price range 275-300 want homes around them of similar value or higher.
Yours may be worth a higher price but the location doesn’t have similar priced homes. I am sure you have heard the rule location location location. There are 26 4/2 plus homes with over 2000 sq ft in your Kissimmee Florida zip code and 10 more if you add in 3 bed.
If you were a buyer looking at these 26 or even only your top 10 choices (3 which are over 2750 sq. ft) do you think yours would be one of them based on location, style and age? This is the competition. Here is a link to the list of what is available.
The highest price house sold in your subdivision is 250K. The most recent sale was only 234K. Based on what is selling and how long it is taking to sell in your Kissimmee subdivision it could take more than 3 years to sell if sells at all.
Look at the values around you and across the street. It is important to note that the most recent solds will be the benchmark for the appraiser and since their price per sq. ft. are so much less, even if you would get the appraiser to adjust an extra 25,000 for granite, tile, crown moldings etc.it will only bring the price to 275-280K depending on the appraiser.
He will also adjust 1/2 of 1% of the sales price for each year of age. So if he does find one the same size which I did in your zip code it was built in 2004 at a sale price of 280K .5% would be 1400 x 30 years difference in age = $42,000 off. Even half of this will still hurt the appraisal because there just aren’t comps in your subdivision to support the higher price.
I realize this is not what you want to hear but we have to deal in the strictest terms especially in this market. Offering a year of HOA, a years worth of taxes, a higher commission or contributing towards a buyers selling costs 3-10K are only a few of the things people are doing now to make their homes the best option for a buyer.
First and foremost is getting it priced right to start. I still feel 285K is too high even if it is a mansion inside, the numbers tell the story for the subdivision. We can’t change that there are just too many options right now for people to choose from and the fact nothing has sold over 250K in this Kissimmee subdivision, let alone the most recent sale was only 234K it just won’t support the higher price.
Even if someone will makes an offer the house has to appraise. It may be prudent to get an appraisal up front. If the market continues its downward trend who knows what can happen in the next 6 months which is how long an appraisal is good. These days with so many mortgages in trouble banks may require updates every 3 months instead of 6.
So if you still think the price needs to be higher than 269,900K I would get an appraisal that backs it up. Then we can leave this out for people to see. The point is getting them to come inside to look. What will entice them to do this? The age, the outside elevation, the landscaping? Usually the price gets it started.
It is not just what is for sale in your Kissimmee subdivision that is your competition but everything in the Kissimmee zip code which blankets your area.
Yes I agree yours probably is the nicest in the subdivision but overall for age, location, and style will it be attractive to the buyer once he sees what all the choices are between 270-300K?
Again of the 20 homes in this price range in your zip code will yours be the one they choose to look inside just by seeing the pictures online?
By the way if someone needs a home over 3000 sq. ft. priced between 275 -300K there are 23 more of these in addition to the others above in Orlando. Here is a link to these which are also going to be competition.
Again I ask if you are looking in this price range at this size home would yours make the top 5 in any of the lists? Yes this is a personal preference but buyers are very discriminating now and much more knowledgeable than before when it comes to value, price and options.
If you are the best value based on price, size and condition it will show! In order to be the best value you have to be competitively priced.
Let me know what you want to do and if you want to consider getting an appraisal up front. I hope I have answered your question of why you should want to offer a better house at less money. The answer is not based on only what your house is worth but what the competition is and what has sold. Most important getting them to want to look inside.Then you can let the house sell itself since you have done a wonderful job!
Teri
Ps
Renting may still be a better option until the market turns around.
