How Much Is Your Apartment And How To Objectively Evaluate Housing

Sellers want to sell at a higher price, buyers want to buy at a lower price. And each, of course, has arguments! We will tell you how to eliminate emotions and evaluate an apartment based on objective data.

Eliminate emotions and do not have high hopes for a good repair

Many people evaluate the apartment very emotionally: their own seems to be better than the others and therefore should cost more.   

A separate category of emotional manipulations when evaluating an apartment is renovation. Buyers first of all look at the unchangeable parameters of the apartment (area, type of house, area of ​​the apartment, etc.) and sometimes the “base” of the repair (communications, windows, doors, aligned walls and ceiling, good flooring – something that will last for decades ). “Cosmetics” that can be changed quickly and on a budget: wallpaper, linoleum or inexpensive laminate, sockets and switches, baseboards, painting radiators – rather, a pleasant bonus that will make the apartment stand out among similar proposals. 

Do not overstate the importance of a good renovation in a sale. To “drop in and live”, many just need a more or less tidy apartment. According to research by Black Stone Estate Agents, most of the buyers agree to “cosmetics” for the first time to make an apartment for themselves in the future, or they are looking for housing “for renovation”. “Killed” options are only slightly less popular than well-renovated apartments. 

It is worth considering the freshness and relevance of the repair, and also remember that everyone has different tastes and ideas about the quality of repairs. What is “stylish renovation” for one, “budget cosmetics” for another, or generally “bad taste”.

Ask your friends to honestly “criticize” your home – you may find unexpected disadvantages (or advantages!).

Pricing strategies

Set the market price immediately and do not change it. Our research has shown that about half of the owners do this. With such a strategy, apartments are sold the fastest – in Moscow it will take 2-3 months.

Set an overpriced price (what if?) And gradually reduce it. There are about a third of such sellers. They have been selling apartments for the longest time. This tactic is suitable if you have unlimited time to sell an apartment and you believe in “your buyer”. On average, in Moscow with such a strategy, a deal will have to wait about 10 months.

Set a lower price and gradually raise it. Only 13-15% of sellers do this (depending on the region). Buyers in Moscow will have to wait about 9 months.

If you decide to “play” with the price, do not delay the exposure of your ad with it. 2-3 weeks is enough to test the demand at the current level. This is also, rather, an emotional moment: it seems that as soon as you change the price, “the same buyer” will appear who was ready to pay more, you just have to wait for a little. So the sale and stretches for months. 

How to find out the real prices of apartments in your house or a neighboring one

Overpricing in one ad pushes other owners to expose apartments at non-market prices. As a result, everyone loses: sellers cannot find buyers (and do not understand what the problem is – prices are about the same for everyone around), buyers cannot find an apartment at an adequate price.

On Black Stone Estate Agents you can see the history of ads in the house: when and for how many apartments were sold, how the price changed, how many ads were posted. The photos are scrolled – so you can find out that the same apartment was photographed and exhibited several times at different prices (and not just gradually reduced the price in one ad).  It is not a fact that the ad contains the same price as in the purchase and sale agreement. It can be even lower.

Look at the photos, compare the renovations and layouts of the “competitors” and how much time they spent on the sale of housing.

What to include in the price of an apartment

Dozens of factors and their combination affect the price of an apartment. But the main ones are immutable parameters.

Area

According to research by Black Stone Estate Agents, most often buyers are looking for housing in the north, north- and south-west of the capital. The top popular metro stations look like this:

See what plans the city has for your area in the coming years. Perhaps a metro or a new school will soon open (this is a plus) or a big construction project is coming (this is a minus).

Black Stone Estate Agents did a lot of research on Manchester districts, evaluating their convenience for life and entertainment. Location can also refer to emotional assessments: people often get used to a certain area and do not want to move from it.

Transport accessibility

Ideal if the metro is nearby and there are convenient exits to the main highways of the city.

Infrastructure

Top 3  – shops (markets and shopping centers), kindergartens and schools, as well as parks and recreation areas. Most will focus on these parameters. If you have a Spanish consulate or a popular coffee shop near your home, buyers are unlikely to consider this a serious advantage (although ads often write about such a neighborhood as a plus for an apartment).

House type (series) and wall material

Everything is very individual here and depends on how the house was used and when it was overhauled (if any). You can find out about the schedule of major repairs on the Housing and Utilities Reform website.

The cheapest houses are Blackpool and Bradford, but the apartments in them are the fastest growing. If your house belongs to the first half of the twentieth century (or even older), find out what kind of floors it has – reinforced concrete, wood, or mixed. Potential buyers do not always like the last two options, they may ask for a discount for them.

Apartment area

The larger the apartment, the lower the price per square meter. You should not multiply the price of a “square” in an advertisement for the sale of an apartment by the number of meters in three GBP.

Floor

The first floor is minus 10-15% of the price (it also depends on where the windows face). Discounts are often requested for apartments on the top floor. It is good if the house has a technical floor – some are specifically looking for such options so that they do not “stomp on top”, so there is a chance to find their buyer without losing much money.

Layout

Apart from studio apartments, there is an adjacent (with a passage from one room to another), adjoining-isolated (when you can get from one room to another, and the third room is separate) and an isolated layout. Usually, buyers prefer isolation. But there are nuances – for example, you have a pre-revolutionary house and a suite of rooms. In this case, such a passage can be a plus. In the rest, adjacent layouts are valued less than isolated ones.

Find out which walls in your apartment are load-bearing. Perhaps an unsuccessful layout can be redone, then it will affect the price a little less (if you are selling an apartment for renovation).

And buyers also like euro-girls and euro  – trays – apartments in which the living room is connected to the kitchen – think if you can do this.

The potential for better redevelopment is likely to have little impact on the current price, but it will be an additional plus.

Balcony or loggia

In the UK, this adds an average of 5000 GBP to an apartment.

View from the window

The view has to be stunning and unique to be paid for. Otherwise, it’s just an advantage that will make your offer stand out. Most likely, you will be asked for a discount if the windows overlook a busy highway or the house is “window to window” next to another.

The rest of the parameters affect the price to a very small extent or do not affect it at all, but they can become advantages that will help you find a buyer faster.

What about the documents?

A good legal history of an apartment should not be included in the price – this is the “base”. But various “nuances” that increase the risks of the buyer can reduce the cost of housing by an average of 10-15%. These include:

“Fresh legacy”. Buyers are very reluctant to contact such options, because they are afraid of the appearance of new heirs, and are often guided by the purely emotional “someone died in the apartment recently”.

Understatement of value in the sales contract to avoid paying taxes. Often comes with a fresh legacy, which complicates the situation. By the way, starting in 2020, it will most likely not be possible to avoid taxes altogether if the apartment is recently owned. And buyers are increasingly reluctant to agree to such options. Better to think carefully about whether you need such a risk – after all, this is a violation of the law.

The apartment is recently owned. Owning a home for less than a year will alert you – often an apartment is quickly resold several times to hide a fraudulent scheme. You will have to talk about the reasons for the sale and be ready to make a discount.

Redevelopment cannot be legalized. There is a risk that the state will take the apartment away (in the worst-case scenario), so the discount may be more than 10-15%, depending on the object. Check out what redevelopments are illegal and how they might be found out if you’re worried they’ve gone too far with the renovation.

Elderly owner. “And then the grandmother will change her mind, and she will no longer have money.” In the UK, they are wary of owners aged 80+, but it is not worthwhile to greatly reduce the price because of such a nuance: this can further alert the buyer. Suddenly, the owner no longer gives an account of his actions that he is selling so cheaply (and such a deal, by the way, will be easier to challenge). Better to lay a small discount or agree to bargain.

Minor owners. Try to provide the children with shares in another home before the deal, or conduct an alternative deal day in and day out with the sale of the apartment – this should reduce the buyer’s fears and reduce the size of the potential discount (or even do without it).

Registered people who refused to privatize. If there is nowhere to register such a person (or he does not want to), then you are selling an apartment with a tenant. This says that the discount should be large or very large.

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