Husky Homes Blog

The snow is melting here in Madison, the sun is sneaking through the gray clouds, and inventory is slowly starting to tick up – finally! It is March, after all, and I know I speak for many when I say that we really need more homes for sale due to the volume of prospective buyers currently out there. For locations where active inventory is low, which is most towns in the greater Madison area, competition has already been fierce to start the year. An exception to this is the neighborhoods where there is active development and high inventory in that same neighborhood or close by for new construction.

The supply levels of homes active on the market, paired with buyer demand, will always determine the price of a home – what a buyer is willing to pay. A home is ultimately worth what a seller is willing to sell it for and what a buyer is willing to spend. What buyers are willing to spend comes down to several factors, some that are logical, others that aren’t so straight-forward.

When working with a licensed real estate professional, buyers can expect their real estate agent to provide guidance on a home’s valuation by reviewing comparable sales. The goal of reviewing comparable sales is to determine the most similar homes that have sold in a nearby radius and compare/contrast them to the home that is being considered for purchase. This is important because it is also how an appraiser will determine valuation, but it does not necessarily equal what a buyer is willing to pay.

There are also many not-so-logical factors that impact a home’s valuation. For example, how was the price set? It wouldn’t be uncommon to have 5 realtors give different opinions about what the list (marketing) price should be for the open market, as pricing is often a strategy, and then you add on a seller’s preferences on top of that. Some agents price lower than market value in order to bid the price up and sell the home quickly, while some agents may price it high to test out the market and see if buyers respond, even if that means increasing the active days on market. Then, buyers come in and weigh the list price with what else is available on the market, how much competition is out there and how strongly they feel they want to/can compete, which can drive the price to go up or down accordingly.

The last set of factors truly come down to how the home is prepared for sale, and if the buyer feels an emotional attachment to the home. Things like staging, cleanliness, and cute curb appeal can make a buyer say “wow, I have to have this house and I’m willing to spend more than I normally would” because of the perception that it is 100% move-in ready and because they can also envision themselves living in this fairytale-like home. A home that has been adorably updated with a spacious kitchen and photo-ready bathrooms, paired with great décor, modern paint colors and fresh greenery inside and out will almost always sell for more than the comparable sales support – preparation is everything. Buyers are typically not creative enough to look past dated interiors, furniture, and paint, so preparing a home to look like it is completely “Instagram-ready” will certainly result in buyers paying more for a home.