Condition vs. Price

I was out over the weekend looking at possible investment properties with a client. Some of the properties had been on the market quite a while. Now I will readily admit that the market is becoming more and more a Buyer’s market and houses are taking a little more time to sell than even a year ago. But the condition and price of your house still, and always will, have a lot to do with how fast your property sells.

Let me make this as clear as possible. If you want top dollar when you sell your house your house had better be in top condition. If it’s not you need to hope you are in a hot Seller’s market (not in Kansas City at this time) or that your Buyer is from out of town and will not compare your property (highly unlikely) to any of the other properties for sale.

There is nothing wrong with selling a property that is not in top condition. But your REALTOR cannot work miracles for you. If every house in your neighborhood is in good condition and every house has sold between $200,000 and $210,000, that is great. And if your house needs quite a bit of work and is located in that neighborhood you can still sell it. But Buyers (and their agents) are generally not stupid. If your place needs $15,000 to bring it up to date most people are not going to offer more than $180,000 – $185,000. It just makes sense.

Be realistic about your pricing. It’s the best thing you can do to sell your house. Don’t under price it. But be realistic.

Also, I spoke of buying based on comparable sales. Let me just say here that is the worst way to purchase investment property. You need to purchase investment property based on the income that property can produce. Not what Joe down the street paid for his. That’s a whole other subject that you can write me about or I’ll address in the future.