Prior preparation prevents…well you know the saying. To be prepared is half the battle is another way to put it. In the luxury real estate industry this rings true. Properly positioning your home relative to the competitive set is the first and perhaps the most important step in selling your luxury home.
All the work involved with researching comparables in your market should take place before you even list the property. Start the process of selling your luxury home by following these four steps.
Current Listings: If you live in luxury condo complex or a gated community, industry standards like square footage, lot size, and number of bedrooms will likely gauge the value of your home. If a house listed down the street is similar in size and scope to your property, it will give you a good idea of the appropriate range for your list price. The more unique your property is, the less this information will matter.
Sold Data:How the sold data has trended over time is also very crucial. Don’t focus all your attention on current listings. After all, another term for “list price” is “asking price”. Just because a seller is asking a certain price doesn’t mean the property will sell for that number. By analyzing the sold data over time, you will realize that much of the market is overpriced. If you truly want to sell, you have to believe what the market is telling you and act accordingly.
Unique Properties: We deal almost exclusively with one-of-a-kind, unique properties. These are the hardest luxury homes to price, as they are incomparable to others in the market. In exclusive areas like Aspen and Kauai, each home is so unique that your neighbor’s list price is almost irrelevant. A good place to start with truly unique properties is to gauge the acreage in the area. People may not be willing to pay high dollars for that spa and movie theatre, but land is land. So, if a similar sized lot sold nearby, you can at least compare the value of the land and add the estimated replacement cost of the home to that. Of course, replacement cost doesn’t necessarily determine the value a buyer will place on the property. After all, particularly with unique homes, buyers likely would not have built the exact same home if they were developing it custom for themselves.
Consult an Agent:Good agents generally tour 20 homes a week or more. They have seen the current listings, know the sold data, and have seen unique properties sell in your market. These agents should be able to recommend an expected selling range and give you direction about where to price your home.
At Concierge Auctions we are happy to be involved in this process with your listing agent. Concierge offers both reserve and no reserve auctions, though no matter what auction format you decide is right, we always reference prior asking or list price. Buyers will use these numbers when they initially start to gauge value.
Similarly, if you are planning to reduce your list price and are still considering auction down the road, it’s definitely beneficial to request our opinion. A reduced listing price may set a price ceiling for the value of your home at auction, so be cautious. Remember: Just because you reduce your price doesn’t mean it will re-ignite buyer interest. Particularly with unique, ultra-luxury properties, price reductions are often a flawed strategy.
What other steps do you take when researching comparable homes and choosing a list price? Leave us a comment so we know you are out there!
