Dan Polimino covers strategies to use when dropping the asking price of your home, the legitimacy of home evaluation tools, and whether or not staging helps to sell your home.
This week's Dream Home Spotlight is on a beautiful 5,400 square foot masterpiece in the heart of the idyllic Tallyn’s Reach neighborhood. ColoradoDreamHouse.com/Glasgow
Hi everyone and welcome to today's show of Ask the Colorado Dream House Team. I'm your host Dan Polomino coming to you live from Denver Colorado. Today on a beautiful sunny fall day. I hope you're having a great day. If you're new to the show welcome. It's all about real estate. We hope you buy sell and invest in real estate. We give you the information the strategies and the knowledge you need to know every Tuesday and Thursday right here live on Facebook and of course we'd love to hear from you. So please leave a comment. Leave a question. Keep the questions coming. You can always e-mail us a question as well at team at ColoradoDreamHouse.com or you can give us a call at 7204466325. Two things we like to accomplish in every show we like to give you some market information.
Just some news you can use so to speak. And we like to answer your questions and every once in a while we like to tell you about a fantastic house that we just put on the market which we'll do at the end of the show today. All right let's get to market information. And the question today is how do you know how much to reduce the price of your home if it's not selling. So you've been on the market awhile you're not sure. How much to drop the price of the house. You know that a price adjustment is probably necessary because all of the feedback from the buyers that have seen it are telling you it's priced too high. That again the question is how much do you drop it by going to give me two easy rules.
The first one is this which is what I used to write about a lot in the Denver Post when I was a writer for them which is if you're getting very few showings or no showings at all and certainly no offers you're probably between six and 10 percent off the final sale price of your home. So six to 10 percent consider that if you're getting some showings but no offers you're probably three to five percent off the final purchase price of your home. And if you're getting lots of showings and maybe have had an offer or two you might be one to three percent off the purchase price. Now this is not a hard and fast rule but I can tell you out of all the transactions we've done in oh so many years this has always held true.
This has been a very consistent method for us. Now there is a whole other method you could use to we call it the eyebrowed test if you drop your house by ten thousand dollars. Is it going to raise any eyebrows. Is anyone going to say ooh I've got to go get that house now. Now that it's reduced$10000. So ask yourself put yourself in the position of the buyer and say to yourself If I looked at that house and I thought it was priced it's a little too high. And they dropped it by 10000. Would that get me off the couch to go make an offer. Probably not. You probably have to make a significant price drop in order to raise somebody's eyebrows. We call it the eyebrowed test right. We give you an example.
Your price it 550 right. You drop by$25000. Now in that price range is that going to raise a lot of eyebrows. Probably not. Because if somebody just wanted to offer you 5:25 it would have done that. Right. 550 wouldn't have stopped them from doing that but dropping it from 550 to 499. That's going to raise some eyebrows. You say Yeah but I left$50000 on the table. You don't know what could happen is that several buyers could all of a sudden get interested in that house at four ninety nine and bid it up to five fifty five 20. I've seen that happen more than once. So when you're considering a price drop you can either use either rule that six to 10 percent three to five percent one to three percent rule. Or ask yourself if I drop it by ten or fifteen thousand dollars is it really going to make a difference.
Is anyone going to jump off the couch for that. Will it raise anyone's eyebrows. Ask yourself. All right the questions dear Colorado Dream House team what do you think about automated home evaluation tools. Well I don't think highly of them. They're out there. Zillow obviously was the first one to do a home automated evaluation tool. It seems like I can't even go on Facebook anymore without seeing some ad from an agent that says Do you want to know what your home is worth. I mean it's like every other ad is do you want to know what your home is worth and they're just sending you to a home out of automated evaluation tool. And whether that tool is accurate or not really doesn't matter because the whole concept is to capture your information capture email address capture your phone number call you see if we can set up an appointment and meet with you.
Now again are they very accurate. No I don't think they are because they're really relying on public data information right. Information that's recorded in the public record about comparable sales within the last six months. But what it can't tell is it can't tell how much you updated your house. But if you've got all brand new kitchens and bathrooms and new hardwood floors and fresh paint. The automated evaluation tool doesn't know that what if you back to open space and you're on a terrific cul de sac the automated evaluation tool doesn't know that at the end of the day what really does get you an accurate price on your home is talking to a real estate professional that does this full time and knows your neighborhood.
All right dear Colorado dream house team. Do you think staging helps sell a home. I do. I do think it helps sell a home. I had a scenario where it was a beautiful home in pristine condition and a grandmother had lived there. But it looked like a grandmother had lived there. The furniture was very traditional and very old there. You know when you walked in the house kind of had a very older persons feel to it. And so we took everything out. We brought some new furniture in. We painted a couple of accent walls. We changed some light fixtures and boom. It made all the difference in the world and the house sold right away. So staging can help. It's not cheap but it can help.
The Colorado Dream House team when determining comps. What are the most important factors. Great question thanks for that well when we go ahead and do comparables we act very much like an appraiser and we think like an appraiser and an appraiser is going to want to see a comparable. That's first and foremost within a half mile radius. Right. So we're looking within a half mile radius. Secondly they're going to want the comparables to be within plus or minus 25 percent of the finished square feet of the subject property. So take your finish square feet. Multiply times 25 percent. Add that to your square footage subtract that to your square footage and now you've got a range of what we can search for comparables with similar square footage. Other thing that we really do is we try to only stay within the last six months.
I mean the six month rule is the real no no rule underwriter's hate if an appraiser goes back six months. In most cases they won't even accept it. So stay within six months. And if it was even sooner like three months better. And so those are the three big determining factors that we use when we're doing our comparables. Is it within 25 percent of the square foot of a home. Is it within a half mile radius and is it within the last six months. Okay. Hope that helps. The house we want to tell you about that we put out this week is Glasgow 2 4 3 5 9 East Glasgow circle and this is in talons reach Lasan. On Tuesday we told you about another home on Marraine that we put in talons reach. That seems to be a very popular neighborhood as of late but this is an extraordinary home.
Its a four bed five bath about fifty seven hundred finished square feet sitting on a little larger than an acre. But thats not the best part of this house nor the amazing views or the best part of this house. This particular seller went hog wild. It is updated to the hilt. I mean it is everything that you would want and more like. This is one of the true homes that you walk in and is nothing to be done like you couldnt think of an upgrade that this guy hasn't already thought of. All right. Its that well done. So check it out on our Web site. Go to Colorado dream house dot com forward slash slash Glasgow. And of course I included the link here on Facebook. All right. Well that's this week's show. We'll see you again on Tuesday. Everybody have a terrific weekend and we'll see you then.