It's political season, at least for Presidential candidates. You only need to tune to any of the news channels to get a full helping of the “conventional wisdom” (CW) of who's up, who's down, and who's likely to go the distance.
From my time in politics I learned the CW is usually wrong. As it is in certain aspects of the real estate business. Here are three examples.
- “'Price Per Square Foot' is a Great Valuation Tool.”
Well, not so much. Even if you restrict its usage to specific neighborhoods, I have found the correlation between price per foot and ultimate sale price runs around 0.55. In GeekSpeak(SM), that means it's moderately good but not great. If you're only going to use one measure, it's the best one to use, sort of. But other methods are better.
- “Pools Don't Add Much Value to a Property.”
The answer to this is, “it depends.” I have found that this really varies by neighborhood. In some neighborhoods having a pool doesn't add much; in other neighborhoods, it's critical. In Wilton Manors, having a pool is a big selling point, especially for buyers with contemplation of doing occasional seasonal rental of their homes. But overall, folks looking in WilMa seem to appreciate the prospect of moving in and jumping in.
- “Anybody in a Neighborhood is Just As Likely to Sell as Everybody Else.”
While never explicitly said, many Realtors I know behave this way. They use a Postal Service tool called “Every Door Direct Mail” (EDDM) to basically carpet bomb huge swaths of territory in hopes of getting a listing or two. Maybe someday. How that works is, you give a big pile of postcards to the post office and they put them, unaddressed and unpersonalized, in every mailbox. You might call this “junk mail” that gets “filed in the round file” when you sort your mail.
When I was in Orlando this past summer for the state Realtors convention, I learned of a service that claims the ability to pinpoint the people most likely to sell, based on neighborhood trends and other demographic factors. The service is very expensive – up to $10,000 a year for a relatively small territory. But as I've said before, all real estate is hyper-local. A little local knowledge, some research and some feel for the numbers can produce an even better result.
James Oaksun, Broward's Real Estate Geek(SM), is a Realtor at RE/MAX Preferred. In addition to having degrees from Dartmouth and Cornell, he is a graduate of the Realtor Institute (GRI).