Real Estate Pricing, its not how much you get off the price that counts….

      It is always amazing to me that buyers base their decisions on how much they get off the asking price when buying real estate.  After 15 years and over 6oo sales I still run across this with particular clients on a regular basis.  Most of the time these are out of town buyers who know little about real estate in New Orleans and the surrounding areas.  They love to use square footage prices as a basis for their facts.

      This method of evaluation  for pricing is a starting point.  Real Estate is all local and location within even small areas matter a lot.  Several blocks one way or the other can see real drops in value.  In the condo market the pricing by foot does not take into account features that people will pay dearly for.  Some of these items include garage parking, balconies, patios, premium units, great views and a great street with an area. To exclude these factors is pure folly.

     As an agent we try to focus on the resale value and help our clients see this as they make their choices.  The premium units that have all the pluses are doing the best even in a weak market.  The units that need things are going to be priced lower.  These should always have a risk factor built in as things may end up costing more. 

     When a agent gets a listing these days many more sellers will listen more intently when pricing their property.  It is easier to get sellers in the beginning or with a specified time period to review the pricing.  This should take place in the 30-45 day period.  Agents know when things are priced correctly but we do not what what a seller may take in the end.  The average selling price remains 3-4% off the final asking price as an average.  This tends to remain constant on all prices of properties.

     The key here is the final asking price.  An example is if a unit is priced at 269k and is worth in the 240’s it may not get the offer needed to sell until the number drops to 249k.  This will be closer to the real value at that time.  Its a moving target that does change with interest rates, people expectations, seasons, strength of the rental market and the macro economic outlook.  Some of these factors can change weekly. 

Offer price on New Orleans Condo

     A buyer in the end see several properties before making a decision and he ranks within price ranges and will then chose the best unit for themselves.  They are able to see past sales history, review trends, looking at tax records, see what the seller paid for the property before making a decision.  They look at the pluses and minsus before making that big decision.  The property will end up getting appraised for a number.  That number will not really tell you if you got a great deal.  The resale value will tell you that and that changes with time. 

      Getting 40k off a condo that is worth 200k when they are asking 250k is not a great deal.  It may make the buyer think like he is a great negotiatorbut that is not the best deal.  Many buyers figure it out and some still do not figure it out.  Not all Realtors know the answers either.  That is why it pays to get the best that knows the info that you need and can help you put the numbers together.   Emotion is hard to over come but its hard to change the numbers once you have all the facts about local market in real estate.  It pays to listen…………It pays to look up the number……..Next time we will talk about how to get at that number……

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA