BEFORE YOU PRICE YOUR LUXURY HOME FOR SALE…

The luxury market trends often differ from the trends affecting the traditional market.  It certainly takes some creativity, especially in the static market we have experienced in 2019. But, even in a market that has been somewhat sluggish, there are strategies that should be considered.  Often, dropping the price is the first course of action.  In fact, a price drop can sometimes undermine the luxury quality of a listing, and therefore should be one of the last strategies to use.

If your home doesn’t measure up, you may want to consider making some smart changes to raise the value. Raising the actual value of the home requires an investment of time and money to complete renovations, update amenities and make the space more neutral so that it will show better when potential buyers come to visit. For higher-end homes, buyers’ expectations require “near-perfection.” A home that needs work if often passed up by second-home buyers because they do not want to spend time and effort on managing a renovation project – even when the price offers great value. Homes trade at higher than market prices when there are no major repairs or renovations required, completely updated and move-in.

However, there is one fundamental that must be addressed - appropriate initial pricing.  While the luxury real estate market differs from the traditional market in that price is often a secondary requirement to a property’s amenities and location, appropriate pricing is still critical to the equation.  Most buyers start the process online and many may have a skewed perception of the local real estate market based on information they see on major listing portals. Often, it will not be evident that a home’s value on Zillow or Trulia will not include the fact that it is on the water or has had a major renovation because the algorithms used by these portals don’t specifically account for such differences. It’s important therefore, that regardless of the algorithms, you and your realtor form a realistic idea of your home’s current value based on comparative sales.  As the seller, you must decide if you want to max out on your home by investing in it to bring it up to snuff.  It’s a trade-off that has a direct impact on the market price. 

If you’re planning to sell your home and you’d like to discuss the specifics of your home price valuation and the impact of enhancements, call us at 631 765 5333.  We’ll be happy to give you a complementary analysis.

Sources: RIS Media, Before You Drop the Price of Your Luxury Home, November 12, 2019.  Institute for Luxury Home Marketing.