Psychologists tell us we make decisions based on exchange of value. Accordingly, we choose the person who offers us most as life partner, and the same goes for the family dog. For the same reason, we dine in restaurants we regard as good value, although of course they must also be convenient.
Marketing emphasises the benefits that goods and services deliver. Read any real estate advertisement and notice how it highlights the best points, while brushing over the rest. We all want to feel we are getting ‘a bit of a bargain’ when reaching a purchasing decision. If you are battling to sell your house, the chances are the perceived value is less than your asking price.
Real, Relative, and Perceived Value in Real Estate
Famous philosopher and writer Anne Rand wrote, “There is no such thing as truth: Only people’s opinions.” Therefore, there is no absolute value for any property either. Realtors value properties by comparing them to recent sales. However, buyers with money dominate because they want to exchange money for real value.
Some of the Reasons Why Homes Are Hard To Sell
First Impressions Count: Kerb appeal, or the viewer’s first impression often sets the maximum amount they are willing to pay. However, this is not just the subject property’s appearance. The houses on either side also have an impact. Even the name of the suburb may have negative associations in some peoples’ minds.
It’s All About Location: A house with a sea view can be worth more than a better one facing the other way. A park or school nearby can add significant value. The opposite applies when there is a run-down empty plot next door. Unfortunately, we generally have little control over our neighbours.
The Fixer-Upper Cost: Most buyers spend their entire budget on the initial purchase price. Hence, they have little money left over for renovating and redecorating. A buyer will often reduce the asking price by their estimate of what the repairs will cost. There is no such thing as absolute value. Beauty is in the eye of the beholder.
Urban Pollution Is a Big Deal: Climate change and the green movement are making Canadians more sensitive to carbon emissions drifting over their properties from motorways and factories. These and other nuisances can devalue a property below its worth, even if they are not a major problem.
Stonegate Equity Ltd. is available to do you an appraisal of your Calgary property, to help you establish the best price we are confident we can achieve. Our service fee is noticeably lower than realtors’ commissions. This gives you a head start, if you reduce the price of your property accordingly.
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Beauty In the Eye of the Beholder: Michael BY CC 2.0