Some call it “romance”, some call it “emotion”, “a vibe”, or “magic” and some can’t articulate it – but they know it when they see it; a home that has the extra special X factor making it more appealing than other homes.
But how do you price for it?
Do you just add some arbitrary amount to the base price? 20%? 30%, or more for emotion?
I’ve heard it said many times by colleagues – it sounds like this:
“Well, if we get a really emotional buyer, they won’t be so concerned with the price…”
One thing is certain – an unemotional Buyer pays less.
Predicting Buyer purchasing behavior is easy in some ways – a list price that is too high will lead to lower demand while an attractive, lower list price will lead to higher demand and possibly multiple, competing offers that exceed the appraised value. This may not be true in the ultra-luxury segment of the market as there are occasionally seemingly outrageously priced outlier properties that get bought to feed an insatiable ego, but can you manufacture demand?
Demand is often is driven by emotion and predicting the emotional appeal of a property is sometimes not easy to do. Smart Sellers do the best they can with the right staging, pricing and marketing plan. Recognizing that Buyers want that “feel good” property, we collaborate with our Sellers to create the most satisfying and emotionally appealing home possible. Before publishing a list price we can sometime test the market by showing the home to a few prospects early in the process. We gauge their reactions, discuss value and pricing, and report back to the owners to adjust accordingly.
The Myth That Price Doesn’t Matter to Some People
Except in rare circumstances, price always matters to someone involved in the purchase of a home. If it’s not the Buyer concerned about the price, it could be his or her partner, business manager, banker, parents or friends.
Some Buyers will even cancel a purchase if they feel their emotions got the better of them. However, sometimes, these emotional sales do close. When that happens, the market notices and neighbors can get excited and hopeful that they can do as good, or better, with their sale. Most times they cannot as emotions rarely come with price tags.
If you’re getting the idea that I am not an emotional Buyer, you’re correct. I do, of course, recognize when a property will appeal to one and I help Sellers leverage their homes potential emotional magic wherever possible; and in a normal, healthy market, the results are predictable – these homes sell for more money than if they had not been strategically prepared.
Price Is Everything To Most People
The real estate buyer of today is the most educated Buyer in the history of organized real estate. They know everything they need to know as all the information is available with a few keystrokes. The majority of them ask the same questions immediately. They want to know the house square footage, the lot size, the list price and list date. They do a quick calculation in their heads and then they either engage, or not. These are the unemotional Buyers to whom price is everything.
What type of Buyer would you prefer to entice?
In Real Estate news, two new homes have come on the market –
451 16th Street– Fully priced at $4,750,000. This is an extensively remodeled Spanish style 4 bedroom home on a 7,500 sqft lot. Detached guest house. Last sold in 2015 for $3,625,000.
434 21st Place– Listed at $3,895,000. Charming and livable 2,500 sqft house on a 9,000 sqft lot. This is a tweener – not a tear-down, but not what most with $3.9M expect or feel great about living in either. Won’t be easy to expand without demoing much of what is here.
Two new escrows:
323 9th Street– There were 10 offers on this little gem, listed at 2,998,000 and rumored to be in escrow for much more than that. This Spanish style home on the corner of 9th and Carlyle features a master bedroom upstairs and two bedrooms downstairs. 2,400 square feet and ready for updating but is livable in its current condition. If you are wondering why the price is low (relatively low, that is) it’s because the lot is just 5,985square feet (40’x150’). Most homes on the block and throughout the north of Montana area are at least 50’ wide. Last sold in 2003 for $1,600,000.
265 19th Street– Listed by Pence Hathorn Silver for $3,595,000. Priced at lot value, this prime location at the corner of Georgina and 19th has generated plenty of interest and several purchase offers. The house is 3,250 square feet and I expect an owner-user will mostly likely be the Buyer with plans for a major remodel under the new zoning ordinance.
Two closed sales:
636 Adelaide Drive– Sold for $6,770,000. Originally listed at $6,995,000 and sold after 39 days on the market.
335 24th Street– Sold for $5,285,620. Originally listed at $5,299,000 and sold after 55 days on the market.