By Diane Saatchi
Sellers and their real estate agents want to present a house and property at its best.
Much effort is made to create eye-catching marketing materials; after all, the aim is to attract buyers. To this end, the house is tidied up, flowers are carefully placed, the landscape is at its finest and of course, photo shoots are scheduled on sunny days. Well-written copy describes the finest features.
When the home is a resale, the beautiful photographs and embellished copy may bring lookers, but not necessarily buyers. In fact, it is possible that the materials may be too attractive.
Imagine being a prospective buyer: You see what appears to be a move-in condition home, within your budget at a too-good-to-believe price for the location. But when you visit you see it needs a new kitchen, new baths, maybe new windows, and that it appears darker in real life than it did in the photos. Imagine your disappointment when you find out that for your needs the actual, all in cost is the price plus an unknown sum to repair, restore, update or rebuild.
A disappointed buyer in this position moves on; the equally disappointed seller stays put until the market increases in value to match the price or the seller reduces the price to market value.
There is no way we can reshape this all-too-common-occurrence to get the buyer what they hoped for in the preferred neighborhood and within budget, but we can avoid such disappointment. And, we can help the seller.
Five to ten years is not old for a home, but…
Current preferences and changes in style have made even a five-year-old house seem “dated.” Some features, like colors and floor and counter surfaces, are easy updates, but basements with 10-foot-high ceilings, double height and open living plans, master bedrooms on first and second levels, full bathrooms for each bedroom and smart home technology can be hard to retrofit. When some or all of those features matter, tear down and new build may be the economical solution.
While there are exceptions, if your house was built between circa1940 and 2010, however well maintained and beautiful, chances are, in this market, home shoppers will think it needs work or should be torn down. When new homes are available, most buyers prefer them; with few exceptions shoppers begin their search wishing not to do any work. If you price to compete with new homes, and there are plenty of new homes available, all things equal, the brand-new homes will sell and yours won’t.
It’s far more efficient to present your home in competition with other resales or with building sites than it is to be considered overpriced and outdated in competition with the newly built offerings.
Using different words to identify house style (a 1950's built ranch is not a cottage), enhanced photography, and overstated copy will not change reality. At best, those ads will disappoint, at worse they won’t sell your property. If you want to sell in this market, it is wise to acknowledge that you are selling a building site or a fixer-upper. If priced and presented accordingly you may receive multiple interest from developers or end users in search of a project.
I am not suggesting taking bad photos or using negative copy, but instead pricing to account for what the next owner may need to do to match the new or like-new competition. Creative approaches such as renderings or images of changed interiors, new site plans, or photographs of the property without existing structures can be employed to illustrate the potential and estimate the costs.
When it comes to marketing a resale, remember: There is no value in ads that give the wrong impression.
Note to home shoppers
Teardowns and fixer-uppers can be the best deals. Unlike some new construction, they offer mature landscaping and thus a potential savings of hundreds of thousands of dollars. Many are livable — even outdated homes can be used while planning for future work — and as such are subject to more favorable mortgage terms than are vacant building sites. A teardown offers a new home at a considerable discount from a spec house because it cuts out the speculator’s profit. And, while it takes time, you will get exactly what you want ---where you want to be.
© 2017 Diane Saatchi