Some factors have no impact on price, and as I wrote about last month, some Factors the Seller Controls, while other factors, such as price the Seller does not control. While the Seller sets the price with a Realtor guiding them, the market ultimately determines the price of a home. There are several items that do not factor into the price of your home.
Your Total Investment in Home Improvements -While more recent the updates to your home will attract more Buyers and command a higher price, the return may well be less than 100% in the short term. Cost versus Value reviews regional and city level data for return on common projects. And, if you select finishes that above what is expected for the price point, the return could be less. At $1,500,000 plus, a professional range (such as Wolf or Viking) is expected. At $750K it is not.
Opinion of Your Home’s Value Expressed by Friends, Neighbors, and Others -How the market values your property is all that matters. As a Seller, you will get numerous opinions from people in your sphere as to the value of your home. The best person to listen to is your Realtor. I often tell Sellers there are five prices for their home – the price you want to get, the list price, the price at which we get showing, the price at which we get offers, and the final sales price.
The Original Purchase Price – Over time most home prices trend upwards. The Real Estate Market from time to time does have corrections or other economic conditions cause home prices to decline or stagnate. The original purchase price plus and renovations / updates and upkeep does not always equal the list price. It is rare, especially with long term owners, not to see a substantial return, but some Sellers that bought at the height of the last market (2006/2007) and purchased a high-end home ($2M+) in the markets I work in (MetroWest Boston) sometimes are breaking even (not considering improvements) 14 years later.
The Amount of Profit you Hope to Make from the Sale – All Sellers want to maximize their return. Sellers that also need to buy – especially move-up buyers – often need a certain level of profit to be able to afford that larger house. The market sets the price irrespective of the profits the Sellers hopes to obtain. The best way for a Seller to maximize their profits is to leverage the factors the Sellers controls.
Doug McNeilly is a REALTOR® with Coldwell Banker Residential Brokerage in Wayland, Massachusetts. He specializes in Wayland, Sudbury and the Greater Boston Metro West Area. He can be reached at firstname.lastname@example.org or www.dougmcneillyhomes.com