After being in Real Estate as long as I have you have stories! Here in this Blog I hope to tell you some stories that may or may not make a valid point.
Today's story is about statistics.
Back in 2000, I had a client, a Harvard Business School MBA. This young fellow was very good at statistics and he ventured out into the Real Estate market confident that this skill would help him make a great deal. We looked at many properties and none measured up to what he considered appropriate. Then we came upon a beautifully remodeled home in San Anselmo. The home was listed for $1,400,000. It had a separate cottage for the office, a full four bedrooms, beautiful landscaping and a gourmet kitchen that would be the envy of all their friends.
He asked me for information on all the homes that had sold in San Anselmo in the past year, and he proceeded to do an analysis of the information. We were meeting at the office during dinner time to write up an offer, so I brought in a Pizza. I informed him the agent had called and there would be another nine offers being submitted. He laid out his spread sheet and told me the average price of a home in San Anselmo of this size was $1,100,000, and the percent of asking that a home received was 100.73. The price he was going to offer was $1,250,000.
After I spit the pepperoni across the room, I suggested he reconsider this offer if he truly wanted the home. "What's average about this home" I asked. Since the offer was not contingent on the sale of another property, he felt this should compensate and put him in better stead than the other offers. Even though I insisted that non of the other offers were likely to be contingent and some if not all would be over the asking price, he was adamant this be the offer price.
I wrote up the offer and told him the next time, because there would be a next time, he could buy the pizza!
Well, I presented the offer with all the professionalism I would muster and was complimented on the best presentation of the day. ( I give the listing agent credit for not laughing at this offer given the circumstances!)
When the dust cleared, the home sold for 250K over the asking price. My client was back on the hunt for a "deal" in a seller's market. The next time we found a home that was more"average" and he bought that.
Houses are widgets, they are each unique. The value they have depends on many factors and some of these factors are not measurable. You can walk into a house and just be blown away by the view, or the smell of the 12 cats that have made the living room home. It is very important to remember, when looking at sites like Zillow, for example, the statistics only hint at the story. They give you a broad background in which to position your unique home.
If you are considering selling a home, call a Realtor. Hey, call me. I can help you understand how your home stacks up against the stats!
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