* If you are buying another property after with selling, there are things that cannot be figured into your list price:
1. Where you are going. If you choose to move to a pricier area of the state or country, your "need" for the funds to do so have no bearing on the value of your present home.
2. If you are buying up. Your choice to move to a bigger home or farm is just that, your choice. There is no such things as we "must have" with regard to real estate values.
3. If you farm or home is your retirement account. Your personal financial situation has no bearing on your property's value.
* If you have made recent improvements or replaced major components in the property to sell it, the cost of those updates cannot be added on top of the property's real value.
The fact that the house needed a new roof after 20-25 years and you put one on in order to sell does not mean that your investment can be tacked on to the list price. Had you replaced the roof five years earlier, this wouldn't have entered your mind. Buyers expect a roof in good condition. New or 5 years old will not change the property's value.
The same goes for a new furnace or boiler. If it was on its last leg and you had a new one installed knowing it would be an issue at inspection time, you cannot add the price of the installed heating unit to the list price. Buyers expect the heating system to be properly functioning with reasonable useful time left in it.
Buyers WILL appreciate and take into account the condition of your property as compared with others resulting in an offer that reflects their appreciation for how you've cared for and maintained the property.
* Conversely, if you decide not to address these problems when getting ready to list using the "let the next guy handle this" mentality, this is what you can expect:
1. Fewer showings, and you'll never know how many you've missed as many potential buyers won't went to view your property. Many buyers request disclosures prior to making an appointment. If they see that the roof is 25 years old or the heating system is original to the 30 year old house, many will skip looking at UNLESS it is priced accordingly (seeming to be at a lower price point than the competition) or it is stated that a credit will be given at closing to remedy or replace the aging component.
2. Final negotiations below what the property is really worth. Buyers often take a $10,000 fix (if estimates are gathered after an inspection reveals the condition of a major old or worn out item) and double or triple the cost in the recalculation of the price. Why? Many reasons. Doubt is created. If there was no mention of the condition in the disclosures, suspicion can arise. "If they didn't tell us about this, what else are they hiding that we or our inspector couldn't see?" or they may have think "What if the removal or repair reveals further damage or uncovers additional work not anticipated?"
If you cannot afford to make the needed improvements, discuss this with your agent and consider giving the buyer a credit at closing to remedy the issue. It makes sense to acknowledge and address it out of the gate. In these situations, the negotiated purchase price includes the cost of repair or replacement. This generally will be in the form of some sort of cash credit to the buyer at time of closing and is deducted from the seller's proceeds check. A common way to do this is for the seller to contribute to a buyer's closing costs, allowing the buyer to use the cash that he/she would otherwise have had to bring to the table to make the repair generally after the sale.
Sometimes these repairs and how and when they are completed are dictated by the buyer's lender depending on what needs repair or replacement. Each case is unique. Your agent can help you navigate through this.
Pricing your Property
Although the housing market has improved overall and New Hampshire's real estate market is stronger in pockets throughout the state than in many regions of the country, it is imperative that you look carefully at what is going in in your particular location. If you are serious about making a move remember that an inflated list price will end up costing you money in the long run. It will definitely cost you time and time is money in the real estate world. Real estate taxes, insurance, maintenance and upkeep don't stop because your property is listed for sale.
How would you price your farm?
Some sellers look back at how much they spent adding things they enjoyed or needed and what it cost to maintain the property, including those updates that needed tending to anyway. They then add up the some of the parts and voilà! - a listing price is born!
Others look around at properties on the market and mentally compare them to their own. You cannot rely on asking prices you see advertised to set your list price, nor should your listing agent. Only the final price and terms of a sale determine the true market value of a comparable sale.
Overpriced listings may have initial interest but then when buyer activity slows or is non-existent, these same sellers reduce their listing prices to try and attract buyers and continue to do so until the buying public responds. Listings such as these tend to linger on the market and generally sell for less than if they were properly priced at the onset.
Some sellers dig their heels in and try to hold out for what they think their property's value is rather regardless of low or no activity hoping that one buyer in a trillion will come along and give them their price. It doesn't happen.
Both scenarios above will result in few showings, low or no offers, and months upon months of having the property listed. During that time, the seller will continue to make mortgage payments, pay real estate taxes, pay insurance premiums and continue to maintain the property to keep it in "show condition".
Do not misconstrue our message as asking you to under price your farm for a quick sale. Nothing is further from the truth. Farms & Barns' sellers continue to enjoy some of the highest sale prices within their communities around New Hampshire-price your property correctly and it will sell! As a rule, specialty farm sales are in proportion to general market sales. Large farms take a bit longer to close than residential real estate simply because there are fewer buyers in this specialty market.
At Farms & Barns, we are dedicated to our Clients’ interests, first and foremost. We pledge to:
1. Provide you with an honest evaluation of your property, based on fact. You will be armed with detailed information to make an informed decision as to what your list price should be. You base your future plans on what your real estate professional recommends and you should be assured that it is as accurate as possible.
2. Provide you with a superior marketing plan. Our marketing works. Let us review what we do for our Sellers that outshines our competition.
3. Bring you the highest price that the market will bear. We sell more farm listings than anyone else in New Hampshire. Our listings sell for more because they are priced correctly, bringing you a quicker sale at a higher price.
Everyone here at Farms & Barns has been a seller at one time or another and we understand that a high listing price is very enticing. The fact is that majority of grossly overpriced properties just never sell. There are a few that eventually do sell and net the sellers less than if they had listed closer to true market value in the beginning. We have strong data to back this up.
We admit that we have lost listings to other firms because our realistic pricing was lower than our competitors' at the onset. Some of you who opted to go with the high price likely had to reduce it (maybe more than once) and it is now edging closer to the list price range we gave you. When the time is right, call us.
We strictly abide by Our Realtor Code of Ethics. We will never waiver from our duties to you. From our Code of Ethics:
-Standard of Practice 1-3
REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.