I had an interesting thing happen this past weekend. I showed a For Sale by Owner listing in an area where few houses are listed with a realtor. It’s a popular area and about the cheapest route to get in a super desirable elementary school district.
My buyer did some of my job for me. They found pictures of the FSBO listings on zillow. I try not to use zillow for a main source of information because their data is often incorrect and they do not list if the seller paid any of the Buyer’s closing costs or if there were any other concessions…..but pictures are helpful to see the differences in the houses.
There were four houses that were all roughly the same size…..so close that we don’t even need to make any adjustments in value for 3 of them. All sold within a few months last summer. The range was $280-$330k. Everything is sounding pretty normal so far, but this is where it gets odd.
I’ll describe each house and let you pick the sale price:
- Sale #1 was 2400 square feet. It backs to a city park. It is all original and even has a green kitchen counter top which doesn’t look that nice with original cabinets that have been painted white. Did it sell for $302k, $280k, $330k or $310k?
- Sale #2 was 2300 square feet. It recently had $45k in updates including new white shaker style cabinets, trendy lighting, subway tile in the kitchen and around the fireplace. Did it sell for $280k, $330k, $310k or $302k?
- Sale #3 was a 2300 square foot house with different types of laminate flooring. It looks like the only newer thing in this place other than maybe the furnace filter was granite counters in the kitchen and bath. This one has an odd shaped lot. It is sort of a triangle so your backyard comes to a point. Did it sell for $330k, $280k, $302k or $310k?
- Sale #4 was just over 2000 square feet so it was a little smaller than the others. It might be worth $12-15k less just due to square footage differences. The kitchen was just remodeled and was equally as impressive as the one in Sale #2. This one had new flooring too. Did it sell for $330k, $310k, $302k or $280k?
Okay, you ready for this?
Sale #1 sold for $330k. It was equal to Sale #3, which sold for $302k. That means somebody paid $28k for the nicer lot. That is nearly a 10% premium. That is higher than anywhere else in town. This was a great deal for the seller and a bad deal for the buyer.
Sale #2 sold for $280k. Yes, the one with $45k in recent updates sold for the least. Bad deal for the seller and great deal for the buyer!!
Sale #3 sold for $302k. This was the house that had more flooring types than Home Depot offers and the worst lot out of all of them. This one was listed with a realtor. This was a fair deal for both the buyer and seller.
Sale #4 sold for $310k. A good deal for the buyer.
So, what is my point in all this? That these people needed the help of a realtor. As a buyer’s agent, I would have advised my client not to pay $28k more than an equal house just to get a better lot. I would have told the seller of #2 that their price was waaaaay too low. I would have told both the buyer and seller of #3 that they got a fair deal. I would have told the seller of #4 to ask for more.