How Do You Kiss The Celina, TX Real Estate Frog?
One of the most interesting phenomenon in Celina, TX real estate today is the transformation a property goes through from the time a person buys it and when they sell it. And no, I'm not talking about the painting, new fence and all of the typical things like that. Quite the contrary. What I am referring to is the fact that when a person originally buys a home in Celina, they are of the opinion that the home isn't worth much. Sometime later, however, it's worth gold when they decide to sell it. In fact, a search of Celina, TX real estate will prove this true.
It's crazy but I see it every day, and recently, I've even experienced it even more so. Now don't get me wrong, everyone who owns a bit of Celina, TX real estate who decides to sell it has every right to do so for whatever price they choose, whether that be one dollar, ten million dollars or some amount in between. However, the reality that not just anyone is going to PAY what a person thinks their Celina, TX real estate is worth is the reality that matters. There are forces that can drive a "willing to pay" price up, or down. And, it's CRITICAL that you know where we are on that scale when you decide to sell.
So here's the deal: In a standard homebuilder type home in Celina where a developer has a number of lots then sells those lots off to several homebuilders, the home prices are very predictable and easily determined. The standard home in a Celina neighborhood may be three or four bedrooms, close to a standard square footage, all the lot sizes are the same, etc. All of this similarity allows for "comps" that are very reliable and these comps drive the basis for home pricing. But, just because comps drive the price, that isn't to say they DETERMINE price. Nope. The rest of the market factors determine that.
It's All In The Data, or Is It?
For Celina, TX real estate that isn't located in a neighborhood with loads of common characteristics, such as a home with acreage, a ranch or maybe a home that has been modified with tons of updates etc., the ability to determine a true "comp value" is next to impossible. It's in these cases that we see usually see frogs get kissed! Hang on, I'll explain.
In these non-traditional Celina, TX real estate situations, I find that people tend to originally purchase their home/property and pay as little for it as possible, sometimes after a home has sat for sale for some amount of time. However, when it comes time for them to sell that very same real estate, all of a sudden it is worth top "well over market value". In a sense, the homeowners have kissed the frog and turned it into a prince, at least in their eyes.
Typically, "prince" prices don't sell, "frog" prices do. That's a hard reality if you are the one who bought the frog and kissed it. But, nonetheless, it is reality. So then does that mean a home or property can never be sold for a profit? Not at all. In fact, adding a "fair profit" above and beyond the cost basis for the home or property is EXACTLY how you sell a frog. And, during times when the market has very little inventory (such as the current case with Celina, TX real estate), then an even larger "profit" or markup over typical inventory market is possible.
Maybe you're thinking "Well, homes in and around Celina are selling for WAY above normal pricing." And it's true, but most time people don't want to be assaulted with a "well above market value" price on these homes. Why? Well, there is a very distinct reason. You see, people are willing to pay more for a home in a low inventory market BUT they don't want to get hit in the face with an obviously overpriced home from the starting gate. Instead, they prefer to have a lower asking price (closer to normal price) and then make you an offer and "win" your Celina, TX real estate. One way they feel taken advantage of and the other they feel like they accomplished something, yet for you, the home seller, the end result in pricing is the same. Theres just two different ways to get there.
This gets even more complicated when dealing with homebuyers in the higher price ranges (and in reality, this range is currently anything above about 1 million) is not only super small, but they also have to WANT and LOVE what your Celina, TX real estate (your frog). What I mean is that the layout has to work, the location has to be right, the design, features etc. all have to work for them. Think of it like this, if you have 20 potential buyers, maybe 5 of them will love your Celina home enough to make an offer on it. However, if you have only 3 potential buyers, most likely none of them will love your frog. It's a pure numbers game.
The Results Of Frog Kissing
So what ends up happening to Celina, TX real estate (frogs) that are priced like a prince is they just sit there and camp, like forever. Pretty soon there is an established history of the home (or property) sitting and not selling so people start to wonder what's wrong with it, why doesn't anyone want it? It's called market wear and its a real prince killer. But, you were warned about this before you overpriced it, right? Hopefully your real estate agent knows what they are doing and DID warn you.
As I said, there is a way to sell a Celina, TX real estate property/homes that is a non traditional with a limited buyers market, again meaning ranches, farms and properties with acreage. The idea is to use a sort of "cost basis." Start with what you paid for a home or property and find as many similarly established "comps." Next, add the cost of all of the true "value add" things you've done to the property. What is value add? It's things that truly add to the bottom line value of a home, or improvements that 90% of average buyers would want added to the home or property. For example, adding a pool where there wasn't one before would be a value add. Installing an outdoor kitchen would also be a value add. Replacing a fence, painting (even the entire home) wouldn't be, putting on a new roof would also not be a value add.
In essence, anything that truly adds value to a home or property as considered from most homebuyers is what you should add to the price you paid for a home in this cost basis approach. Things that you do that are unique to your tastes or situation (like adding a 10 car garage, putting in a Koi pond or a meditation garden, etc. are not value add items because "most" buyers would not want that or need it.
Now, back to our cost basis concept. Start with the "comp" price, add the true "value add" items. In other words, you have a home that "comps" at $500K, but you've updated or added a shop etc. so you've value added $100K. Now so you are sitting at $600K BEFORE considering current market conditions, inventory etc.
So, for the frog kissers, they will now jump up to $750K because they've heard that people are over paying and they want their piece of Celina, TX real estate. Ribbit. Many times they are set to learn a basic real estate rule that even many agents haven't quite figured out: No value you place on your home is the right value if nobody will buy it for that price.
Beyond getting market worn and creating a real negative marketplace perception for your Celina, TX real estate (which equals no sale) you also have the sad reality that you will continue to pay property taxes, insurance, utilities, upkeep and a mortgage payment (if you have one) on a home that doesn't sell; all the while, risking a catastrophic loss at the property (flood, fire, wind damage, freeze) that will really make your little would be prince into a frog.
The Solution
Those who choose NOT to kiss the frog (and my clients) will take a different approach to selling their Celina, TX real estate. These savvy sellers would instead place our example home on the market for something closer to the $600K "comp and value add" price and then wait until the offers start rolling in. Of course, in a very limited inventory market like Celina, TX is experiencing, EVERYONE is going to want to come see this home just on the "chance" that they could get it close to this price.
Once the potential homebuyers see it and fall in love with it, they are as hooked as could be and then their mission becomes "get the house." Of course, there are likely many other buyers who want your home as well and who will share the same mission to purchase your home. Let the battle of the suitors begin. In short order you will likely have a very strong and solid offer on your Celina, TX real estate and you will ultimately have a homebuyer who is proud of their accomplishment. Plus, you get to go to sleep at night knowing you aren't a greedy, nasty person. Nope, but smart? That you are.
Meanwhile, those who decided to overprice their Celina, TX real estate are suffering in other ways as well. You see, there is also a mental and stress related component to kissing your frog. When you set a well over market price for a home or a property that doesn't get you a quick sale, you have the mental weight of carrying that around with you, always wondering if it will sell, did you make the right choice in setting the price for your home, etc. And, believe me, there is huge value in removing stress from your life.
Ultimately, most property owners finally decide that they will just keep their prince (frog) or they will come to their senses and sell the frog as a frog, but for a much more reasonable profit, which actually makes them a super smart seller, and not a stressed out frog keeper.
The homes and properties you see sitting (camping) for sale on the market are almost always people who are determined to get "well over market value" for their Celina, TX real estate. In fact, this is the case 9 out of 10 times. Proof can be found by searching the "sold" listings of these types of properties. Not only will you see that the current frog owner originally purchased their Celina, TX real estate at reduced pricing, but you will also see that they too had to sell it as a frog after learning a valuable lesson -hopefully for a profit though. In other words, they bought cheap because they were the buyers, then over priced when they decided to sell the same property, yet usually end up selling after price reductions, stress and such.
Conclusion
So what's the moral of the story? Don't kiss the frog. You may think your Celina, TX real estate is a prince now, but it's probably not and most of the rest of the world will agree. It's an overpriced frog and nothing more. Be smart, make a fair profit based on real market conditions and cut the stresses -your life will be much better for doing so.
Kiss the frog and call it a prince, put it on the market forever, don't sell it, let it get market worn, live a stressful life and be unhappy OR sell the frog, make a profit, move on, be happy. It's up to you.
If you have a frog that you've kissed and prince charming is still sitting there, give me a call. We can get you a great price and make your life so much better!
Ron Lyons
214-783-5440
Ron@RonLyons.com