Fab Real Estate Blog: Pricing Issues: Location

Pricing Issues: Location

When it's time to sell your home, among the myriad of things to do to get your house ready for sale, you must determine the best price at which to list and market your home.  Price too high, and buyers and their agents may not even come to see your home.  Price too low, you may enjoy a quick sale, but you could leave money on the table.  Pricing competitively - based on recent similar sold homes while considering the current active competition for your home - will result in more showings, more interest and the achievement of your goal:  the sale of your home.

Many factors must be considered when pricing your home.  The total square footage of the home is one major consideration.  Another major consideration is your home's location.

You've heard the saying:  The three most important factors in real estate are location, location...  (I won't repeat it the third time.  It's annoying.)

How can location affect the value of a home within your town?  Very easily.

  • Homes on a main road will have a lower value than homes on quiet roads
  • Homes on a cul-de-sac will have a higher value than homes on through-roads
  • Homes that back-up to retail or commercial space will have a lower value than those in strictly residential areas
  • Homes with steep driveways will have lower values than those with level driveways
  • Homes with water frontage will have higher values than those without such frontage

These and more factors must be considered when pricing your home.  Your agent should prepare a complete market analysis for you that takes all pertinent issues into account, thus determining the appropriate list price for your home.

Here in the Candlewood Lake area of Connecticut, typical adjustments I use based on location look like this:

  • Home is located on a main road:  Deduct 5-10%
  • Home is situated on a cul-de-sac:  Add 10% versus a home on a main road, or add 5% versus a home on a regular through-road
  • Home backs up to retail or commercial space:  Deduct 10%
  • Home has a steep driveway:  Deduct 2-3%
  • Property has water frontage on a pond or small lake:  Add 5%
  • Property has water frontage on a large boating lake):  Use comparable sales that also border the same or similar lake.  If not possible, then you may need to get creative, and consider an adjustment of adding 10% or so.

These adjustments may be altered depending on specific circumstances, as each situation is different, but they are a good guideline.

Of course, the ultimate market value of your home is what a ready, willing and able buyer pays for your home.  As real estate agents and appraisers, we don't control prices, but we can look at the market, it's history and the trends we see to determine the best price for your house.

Correct and competitive pricing will draw the buyers and their agents to your home.  We want to attract them in droves to sell your house!

Comment balloon 6 commentsDon Fabrizio-Garcia • January 06 2007 09:46AM

Comments

location (I finished the sentence for you...) you are such an appraiser... on a cul-de-sac backing up to a main road... deduct 10% add 10%?
Posted by Maureen McCabe, Columbus Ohio Real Estate (HER Realtors) over 11 years ago
Maureen - Yes, I'm an appraiser and a real estate agent.  How'd you guess?  On a cul-de-sac but backing up to a main road...they'd sort of cancel each other out, though backing up to a main road may win out, if it's noisy and eliminates any chance of privacy, thus requiring a deduction in value.
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 11 years ago
Don, does not make any sense to put your house on the market at at price that no one will look at it, but unfrotunately Sellers sometimes just want to have their ears tickled instead of listening to sound advice.
Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 11 years ago

George - Unfortunately, a lot of sellers truly believe that their home is better than any other home that sold.  And, unfortunately, some agents will "buy" that listing by agreeing to list at whatever price the sellers want, assuming they'll get price reductions later.

I've also met agents who cannot price a home.  It's sad.  That's part of the reason why I went ahead and began the process to become an appraiser in addition to being a real estate agent.  I'll gain more knowledge and I'll be better able to represent my buyers and sellers.  Plus, I'm one of those who likes to determine value, so appraising is fun for me.

Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 11 years ago
Location, Location, Location !  Thatnks for sharing the different percentages.
Posted by John Hruska (Homes Charlotte, LLC) over 11 years ago
John - Keep in mind that these percentages are starting points for my area, and may need adjustments based on your locality or the specific situation of the property.
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 11 years ago

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