To put things in perspective for our buyer-clients, when we are working with buyers and come across a property that has issues that limit its appeal, we often discuss “Sam’s three strike rule”. Here it is:
- If a property has one issue but is otherwise great, some, but not all buyers may overlook that issue and buy the property.
If it’s an average property, more buyers are likely to consider the issue and will either pay less for the house or move on to another house. (A good example of this would be homes or condos on busy streets.)
- If a property has two issues, it will be harder to sell and will almost definitely fetch a lower price than other properties of similar size and condition without those challenges. (Examples would be a property on a busy street (strike one) that also has a condo association with some challenges or a single home with a very small back yard (strike two).
- If a property has three or more issues and none of them are correctable, the property has three strikes and is out because it would be a tough resale even at a low price.In a buyer’s market or a normal real estate market these are the properties that sit on the market the longest until they finally sell at a low price. In a seller’s market, these properties are often priced high enough that unsuspecting buyers will lose value when the market shifts.
The only exception to “Sam’s three strike rule” is that sometimes issues can be corrected to enhance a property’s value and future potential, if it can be bought right.
One of the biggest mistakes is that most buyers assume that when the time comes to sell, they will be able to find buyers just like themselves that will love the property and see it the same way they do, but our experience with hundreds of properties tells us otherwise. When we advise our buyer-clients about homes or condos they are considering, that is why we always consider:
– how various issues can impact a home’s value
– what improvements could add value or marketability to the property
– future resale potential and the potential for appreciation or depreciation in future markets that could be different when the time comes to sell
Posted 8-9-2022 by Sam Schneiderman
Updated from a blog post written by Sam Schneiderman for Boston.com blog on 3/29/2010.
Copyright 2022 by Sam Schneiderman. All rights reserved.