Linda Heubach, REALTOR®, E-Pro
952.931.9008
Partner in Counselor Realty's Wayzata Office
Top 5% in Sales in Minnesota Last Year, All Agents
E-pro Certification National Association of Realtors (NAR)
Member CRS - Council of Cert Residential Specialists
Self Employed 30+ Years in Housing & Service Industries
Linda is the high touch people specialist & Leader of our team

Chuck Heubach CRS CRB GRI
952.239.1311
CRS Council Certified Residential Specialists (NAR)
CRB Certified Real Estate Broker (NAR) 1 of 37 in Minnesota
GRI Graduate Realtor Institute (NAR)
Real Estate Instructor
Appraisal Experience
Mortgage Industry Experience

Call Us To Customize an Opinion of Value for YOUR Home

Why Didn't My House Sell?

11. Location Theory

We already discussed location on step three, but now it is time to look at a specific case. 

Let's say that the 1st home we are attempting to sell a single family home on a busy road.  There are four lanes of traffic with an ugly yellow line down the middle.  It's one of those roads where parking is legal but you wouldn't dare...in fact, people will honk at you if you try.

Everything is also true about the 2nd home, except that it is lakeshore, on a nice recreational lake.  The lot sizes and home design are identicle, and the homes are both one year old.   The cost to build them is 280,000 each.  What is the difference in value? 

Regression and Progression.  The principal of regression states that between dissimilar properties, the worth of the better property is affected adversely by the presence of the lesser quality property. Conversely, the principle of progression sates that the worth of a lesser property tends to increase if it is located among better properties. 

Clearly, the lakeshore property is worth more than the other, although both are located on the same street, the same town, the same school district.  Both families shop at the same stores and have the same potential commute to work.  But the lakeshore property value is lowered by the mere existence of the other home, and the non-lakeshore home is increased because of the lakeshore home.

Unsuccessful sellers tend to minimize the external effects on the value of their real estate.  In the example above, the lakeshore home would be worth more money if the other home were never built.  And yet is is not worth anywhere near a home on the same lake without the busy road.  In fact, the both houses on the busy road detracts from the best real estate on the lake.

Why?  Because more buyers will consider buying the better house, but will not when MOST of their needs are met by a less expensive alternative.  It's the same reason we will often dine at a moderately priced restaurant although we know the food is better at the gourmet establishment.  To fairly value your home, contact us for a no cost analysis.

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