Creating Value

In this video I discuss Value, not value based on comparable properties but value based on creating value in a property by positioning and salesmanship. Location, Location, Location is the number 1 rule when buying real estate. Being in a great location is the surest way to create value. By purchasing in the right location, you can in fact do nothing to the property and resell the property for more money just by being in a desirable area. There are homes on the market now trading for $3M and were purchased for $300k in 1996. I rather have the worst house on the block in the best location versus the best house in the best location.

Value is also created by the style of the home. A raised ranch is less desirable than a post modern or a colonial. Age of the home will also affect value. The materials used in the home and level of craftsmanship are important and create value but most of the time they get overlooked as the real estate agent isn't showcasing the value due to a lack of understanding. It helps when the client (buyer and seller) and real estate agent understand the finishes and cost associated with the improvements made to the home. Then when a buyer is looking at other homes, they will have an understanding of the cost associated with custom finishes (custom kitchen cabinets, interior trim package, etc). Buyers will become educated and have a clearer understanding of the value in each home ( I like to compare a Toyota to a Lexus ).

"Sizzle" features are items in a home that help in standout from its competition. These can include an elevator, a wine cellar, a pool house, a bowling alley. These are things that are something unique and separate them from other properties on the market. What is the value created from these items? Are these "Sizzle fateures" attractive to all buyers or only to a select few? To answer that, we must understand that the value created may be only attractive to a small group of buyers or it will appeal to the masses. For instance, an indoor basketball court may appeal to a certain type of buyer and turn other buyers away. To the person that gets emotionally attached to buying a home with a basketball court, the value being offered is worth the money they are paying for the home because they can justify the purchase because they are receiving value. Value can be subjective and can also created by positioning and salesmanship. Money is an exchange of value. Is your home being presented to showcase the value.