Sam's rule
Sam Schneiderman, Broker-owner of Greater Boston Home Team tells his buyers to watch for strikes against a house. Three strikes, it's out!
On March 15th, I wrote about homes that had limited appeal. Simply put; the more limited the appeal of a home is, the longer it will probably take to sell and the lower the sale price will probably be in the end.To put things in better perspective for my buyer-clients, when I’m working with buyers and we come across a property that has issues that limit its appeal, we often discuss “Sam’s three strike rule”. Here it is:
1. If a property has one issue but is otherwise great, some, but not all, buyers may overlook that issue and buy the property. If it’s an average house, more buyers are likely to consider the issue.
2. If it’s got two issues, it will be harder to sell and will almost definitely fetch a lower price than other properties of similar size and condition without those challenges.
3. If it’s got three issues and none of them are correctable, as far as I am concerned the property has three strikes and it is out because it would be a tough resale even at a low price.
The only exception to “Sam’s three strike rule” is that sometimes issues can be corrected to enhance a property’s value and future potential, if it can be bought right.As I’ve said before, most buyers see a property through their eyes only and can't differentiate between their own circumstances and the rest of the market's probable reaction to the same property. If they can, the average buyer doesn’t have enough real estate experience to know how various issues can impact a home’s value in the current market, evaluate future marketability or gauge potential for appreciation. In those cases, a buyer should get objective feedback from someone with lots of experience, because usually, you don’t know what you don’t know, and what you don’t know in real estate can often become expensive.
Buyers and owners: how do you, or did you, evaluate a property with issues?
Sellers: if you sold a property that had one or more issues, how did the market react to that?
How did you adjust for the issue(s) in your asking price or did you just ignore the issue(s)?What issue(s) would concern you and what issue(s) would you overlook?
