Location, condition and price
It used to be whether you were selling or buying real estate, all that needed to be said was "location, location, location".
Today, Charleston real estate is really location, condition and price. Let's examine how each affects the sale.
Location is fixed, land is immovable, the property is located where it is and homes in the same neighborhood are usually comparable to one another. Economist Al Parish, director of Charleston Southern University’s Center for Economic Forecasting said this about Charleston real estate, "drive until you qualify". The essence of his comment is quite simply this, start in downtown Charleston and the Historic District and you will find some of the most expensive real estate in the area. Generally speaking, though there are pockets of very expensive real estate quite a distance from downtown, the further you drive from downtown, the more affordable the property will be.
Condition and price are factors that are influenced by the seller. Condition can be anything from pristine to "as is" and more than likely somewhere in between. The better the condition, the higher the price.
If a seller is willing to fix just about everything from important inspection issues to minor cosmetic items, the smartest approach would be to take care of all the cosmetic items before putting the home on the market. Additionally, the seller would be well served to have a home inspection prior to listing and taking care of those issues upfront as well. Offering a home warranty to the buyers will provide them with additional peace of mind.
Lastly, because the seller does plan to sell and then move to another house, the last and a very important thing to do prior to putting the home on the market would be to start packing and getting rid of clutter at the same time. Freeing up closet space, reducing the clutter and depersonalizing the home will make it appear larger and have no distractions for the prospective buyer. In this type of situation, it is likely the home will command top dollar.
On the other hand, if the house is dirty, messy, run down, and signs of wear and tear are everywhere and the seller has no intention of fixing anything or straightening up, it is likely to sell for much less if it does sell at all. Of course, there are bargain hunters and they will be attracted to a "fixer" but they generally want to pay a much lower price in exchange for the sweat equity they will provide to make the necessary improvements.
The seller usually has a dollar figure in mind of what the home is worth. The real estate agent prepares a comparative market analysis (CMA) of similar homes that are available for sale as well as those recently sold. It is usually expressed as a range and hopefully the seller's idea of the home's value is somewhere in the range.
If the seller wants to get the highest possible price, they usually will be at the top of the range but if the seller is interested in selling in the shortest possible time, it usually will be priced at the bottom of the range. If the seller's idea of the value of the home is significantly higher than the results of the CMA, a bit of discussion between the seller and real estate agent must occur to arrive at a reasonable price that satisfies the seller and will still be marketable.
I remember a seller who was going to both list his home for sale and purchase new construction. He told me that he wanted to sell for what the cost of the new home was going to be. Of course, it would have been ridiculous and I asked him, "would you buy this home for that much?", his answer, "of course not" and my reply, "well, why would anyone else pay that". He understood, we priced it right and went under contract within 45 days and he is happily living in his new home.
The listing price is based on comparables, similar properties that have sold and similar properties that are actively competing for the same buyer. Pricing takes both into account because even if the property was priced very high and for whatever reason a buyer felt that it was still ok, the property has to appraise in order to get loan approval. A bank will not loan $500,000 on a home that is worth $400,000. Similarly, if nearby homes are available in abundance, the highest priced home will generally be at a disadvantage.
In today's Charleston real estate market, the seller has to be aware of condition and price more than ever before. With an abundance of inventory available on the market, the buyers have lots of choices. If a buyer compares homes similar in condition and price, the larger home will be selected. If they compare homes similar in price and size, the home in better condition will be selected. Finally, comparing homes of similar condition and size, the home with the lower price is likely to be chosen.
