Buyer's Math, Richmond VA Real Estate

Buyer's Math, Richmond VA Real Estate

Buyer's Math, Richmond VA Real EstateBuyer's Math, Richmond VA Real Estate - I recently met with a potential seller who is thinking about listing their Richmond home for sale. After a brief tour of the property, it was evident some updates were needed. When we got down to the nitty gritty, I explained how important first impressions are and that we only get one shot. When we were discussing the updates, the seller had common objections, AKA: common mistakes. They said they would give an allowance for certain things to be upgraded. While I think it is great that they agreed items needed a spit shine, an allowance will actually cost them MORE down the road than if they completed the work before the property hit the Richmond VA real estate market. I attribute this to what I call Buyer's Math.

What is Buyer's Math?

Buyer's Math is when a potential buyer assigns an unrealistic value to a project. For example, if the home needs a new HVAC they may calculate $10,000 for the project when in reality it may only cost half of that. Or, they may estimate $5,000 for new tile when the actual price could be $2,500. See where I am going? Buyer's will automatically double the cost of needed updates! Now, I am not picking on buyer's here. Not only am I am Richmond VA Realtor, I am also a many-times-over home buyer. In the last 12 years my family has bought 8, yes EIGHT, properties. In each case, even I would over-estimate the cost of repairs even though I knew better. WHY did I do this? For a few reasons. First, I padded the budget for unforeseen problems. Second, I added the cost of MY inconvenience into the equation. Finally, because buying a home is an emotional process, even for those of us in the business.

Do Your Homework First and Play Later

So what should THEY do? What should YOU do? Do what I tell my kids: do your homework first thing when you get home off the bus so you have it out of the way and can have the rest of the night to play. As a seller, if you do the work upfront you will have a lot more negotiation power and will likely yield a much higher price than if you put the burden on the buyer. Putting the burden on the buyer puts a burden on your wallet. A good buyer's agent will use the outdated features and systems to try and negotiate a better price for their clients, and they will often use the buyer's math!

Richmond VA Real Estate Agent

Searching for a Richmond VA real estate agent who understands the value of YOUR dollar? Contact me, Shannon Milligan at the RVA Home Team with Keller Williams Realty, today!  

Post a Comment