There's one born every minute

There’s One Born

Every Minute

Many years ago I sold a house on a quiet tree lined cul-de-sac.  There were seven houses on the street all built by the same builder at the same time in the 1950s.  The house next door had just recently sold for $390,000 with the same number of bedrooms and bathrooms (3/2), almost exactly the same layout in a mirror image with only a marginally larger piece of property.  Ironically, both houses had an updated kitchen and one of the two bathrooms beautifully redone.

When sitting down with the homeowners before putting the house on the market trying to determine price, the sellers (also my friends) said “Oh, our house is worth more than theirs [the neighbors who just sold].” I looked around, tapped the walls, stomped the floors with my booted feet and asked “Why? Did you use gold nails?” I stole that line from a real estate trainer but it is true.  All things being equal, short of there being buried treasure in your backyard, why is one house worth more than another? Simply said, they’re not.  Sure, there are some things that add and detract from value but all in all, again all things being equal, they’re worth approximately the same.

You’ve spent years in your home, possibly decades, and you have lots of memories there, both good and bad. But they are just that, memories. If it is time to move on try to take the emotion out of the equation; although difficult, remember this is a business transaction and emotion has very little place in business.  Your home is more than likely the single largest investment you have made in your lifetime and needs to be handled with the utmost care and attention to the bottom line.

Perhaps we will be able to find someone who is willing to pay you substantially more than the same house that just sold next door, but more often than not the buyer will be obtaining bank financing.  Banks, to protect their own investments, send out an appraiser to determine the value of the home.  If the appraiser’s value doesn’t match the agreed purchase price the deal, very often, falls apart unless the buyer and seller are willing and ready to renegotiate.

The value of real estate is determined by what a seller is willing to sell for and what a buyer is willing to pay.  Ultimately, however, the value is determined by what someone [a bank usually] is willing to lend against it. Unless the buyer is all cash, appraisal is key and will determine if there is, in fact, going to be a sale.