For those of you that know, in luxury real estate, it's all about value and emotions, but emotion comes first. A buyer will easily ignore the home features, if the property it's in the right neighborhood and has a history (aka famous previous owner). Why is that? Because expensive features can always be added, but location and history of the home cannot be transferred to another home. This will give the buyer a sense of superiority (aka great emotion).
If you don't believe me by now, let me put it this way. I have lost $43,850.00 learning this lesson. That's $43k in one shot on an all cash transaction to close in a few days, just like Million Dollar Listings - Los Angeles. Here is the story behind it.
The home seemed overpriced to me comparing the $1.85 million price tag, for a home that was 90% original (aka never updated). Everything in that house was so old, and the size of it was not that big. From my perspective, a businessman will look at price vs value, and there were many other homes that had more features than this one and a lower price tag.
2. Location and History
Here is the part that I missed. Even if the home was almost a total remodel, it was in the right neighborhood, on a huge lot. It was positioned just right to update, expend it and make it the best on that street. Besides that, the home was designed by a very famous architect, therefore it had history.
3. The Lesson
My mind was always in the value vs price, but never on the possibility to build an incredible home in a great neighborhood, with a history that no one can take away. This made that home one of a kind, and so the owner! Remember, price is never the issue, how the owner will feel after buying the property, will matter the most.
Alex Sirb is a residential real estate agent in Northern California/Sacramento area, focusing on high-end and luxury properties.
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