b-LOG: Putting a Value on Perceived Value
In most of our homes, we as the homeowner often see a value that not all buyers will see. We feel or perceive a value in that tropical basement hot tub room or imported mosaic tile that others may feel is ‘not so pretty’.
In general, we can all agree that there is a range of appeal amongst the various items or changes we can make in a home. For example, renovating a bathroom with quality but reasonably generic materials will have a similar perceived value amongst most buyers. Another example may be a home with 4 bedrooms or a bungalow with large square footage. In the grand scheme, it all comes down to how available the item is.
One we have dealt with several times so far this year is in homes backing onto ravines or parkland. What is the perceived value of a home backing onto an expanse of parkland versus the same home on the other side of the street that backs onto other homes? Well, that is the million (or thousand, or 10,000 or…) dollar question.
Our office was through a home backing on prime ravine land last week. Several of us started talking in the dining room while looking out at the lovely green space. I was shocked that even amongst full-time, professional REALTORS, there was a difference of opinion and perceived value. Some felt it added 5% while others felt it would be closer to 15%. On a $275,000 home, this difference could amount to the better part of $30,000.
So, what have we learned from this? Well, we REALTORs or we sellers can attach a value to a given benefit that a home has but at the end of the day, the value of that perception will ultimately be up to the buyer that is paying for it. Not a perfect science but part of what makes the sale of residential real estate so interesting and challenging on a day-to-day basis.
Do you have a perception of value that you would like to share? Call or email us anytime.
Thank-you for visiting.