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Steer Clients Away from Urban Real Estate Myths

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By Bruce Nemovitz

“We can always come down.”

Yes you can always come down…way down! Pricing a home too high to “test” the market sounds like a good idea. But today’s buyers are smarter and better educated as to values than ever before. The Internet provides all the information a new buyer needs to know in order to determine if your home is over-priced. When a home is priced too high to compete with other similar homes in a similar area, the result is few showings and longer market time. The longer a home sits on the market the lower the offers will be if there ever are any offers. A well-priced home will sell quicker and closer to the asking price as buyers will not want to wait, realizing that it is a good value. Don’t over-price your home and listen to the professionals who will research the market for you.

“My neighbor said that we are pricing our home too low.”

Think about it. Who has the biggest stake in you getting the highest price other than you the homeowner? Your neighbor is concerned about the value of their home. The more you get from a purchaser, the more their home may be worth. Therefore, neighbors who love their home and neighborhood would have an emotional investment also. They have not researched the market, in most cases, and are basing their opinion on a feeling as opposed to reality. Once again, listen to the professionals who will establish price based on fact. Location and condition are the leading factors in setting a price for your home in the marketplace.

“I heard properties are way up.”

Yes that is true…in Arizona, Florida and other areas that were hit hardest by the real estate downturn. Our area, as may be the case in your region, has always been much more stable than other locations where weather draws people from all over the country. Wisconsin did not experience the 40 percent – 50 percent reductions during the recession. We are, therefore, not seeing 20 percent increases this year. In fact, each area of the Greater-Milwaukee area is unique. Some areas are increasing by 5 percent and some are stagnant. Other areas are still experiencing high inventory and slightly falling prices. So the increase, or lack thereof, in your neighborhood depends on location. Don’t listen to reports that are generic and national. They do not reflect local market conditions.

“My tax bill states that I am paying my taxes based on a value of my home and I expect a buyer to pay the assessed amount on my tax bill.”

Your tax bill establishes value every so many years, depending on the community you live in. Therefore, it is not fluid. It does not change every day so it cannot be accurate and up to the minute. So you can see that at times it could be close to reality and other times way off. The most important factor for establishing value is to find homes that have just sold with a similar assessment in a similar area and see what they sold for. Also remember that your assessor does not take condition into account. Condition can factor up to 50 percent from a low to high depending on how a property is presented. Once again, a professional real estate agent can offer an accurate assessment of value based on today’s comparables and factoring in the condition of your home when ready to sell.

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