Selling Real Estate in Northern Wisconsin- What affects Market Value?

Real Estate in Northern Wisconsin is a definitely a different market than most places but there are certain true statements about what affects market value that run across many borders and markets. To this respect Northern Wisconsin properties are not that different.

One of the most common questions I'm asked as a local professional is: " What will affect the market value of my home???" People have many different ideas about how market value is arrived at and who determines it. The most amusing to me is the belief that the REALTOR affects market value by pricing the homes they sell. Some people still think agents set the listing price and real estate in Northern Wisconsin just doesn't work like that.

So, what does affect market value of a home???

• Location - This can be the single greatest factor affecting value. Where you are in relation to what school district and how far you are from local amenities. In Northern Wisconsin this can also be what lake area are you in, what body of water are you on and what proximity are you to additional recreational activities.
• Competition - Buyers compare your property against other properties offered in the market place. What is your lot size, frontage amount, home size, home age, floor plan, are you steep or level to the lake, are you year around or seasonal and who are we targeting and in what price range.
• Timing - The current real estate market may reflect either a buyers' or sellers' market. Are lending practices lenient or stringent and what financing is available. How low are interest rates? Seasonally, is it the right time to be on the market. Are the buyers actively looking or just shopping online. What is buyer demand versus current inventory?
• Condition - Property condition affects price and speed of the sale. Optimizing physical appearance and preparing in advance for marketing maximizes perceived value. Staging can increase value and decrease time on market.

There are certain items that have no real value to a home no matter how much we want them to:

1. Purchase price of the home
2. Amount of money in the home
3. What a neighboring property sold for 3 years ago
4. Assessed value of the home

The above reasons often lead to the overpricing of a home and every seller needs to be made aware of the real risks of overpricing a home, especially in a volatile market like the one we are experiencing now.

Some of the risks of over pricing include:

• Missing the peak selling market b/c your price was too high. The longer the days on market the more a buyer feels he is going to be able to negotiate.
• Helping your competition sell. If you are priced above your competition you are actually making their home more attractive to potential buyers because their home appears to be a better bargain.
• By over pricing you may have to eventually drop your home below market price to compete with new well-priced listing.

You run the risk initially of loosing buyers to other properties because they feel you would not be willing to negotiate and come down in price. You could then loose them again because when you do reduce your price, months later, their perception of the market has also changed for the negative thus lowering what they are willing to pay for your home in this "new" market. So, you have lost some control in the negotiation.

So, the key to selling real estate in Northern Wisconsin is to price your property competitively from the start to avoid any of the risks above and generate good buyer and broker activity from the start!!

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Copyright©by Julie Paez, All Rights Reserved, Selling Real Estate in Northern Wisconsin- What affects market value?