Perception is a funny thing. For those of you who have not been living under a rock for the past few years, you have no doubt heard that the housing market is not as healthy as it once was. It has had an impact on almost everyone in one form or another, and while it will have its ups and downs, it doesn’t appear that it will be recovering too much in the near future.
Millions of people have lost or are going to lose their house to foreclosure. It is on the news every day. Millions of people are having to Short Sale their home, meaning that they are giving the bank less than what was originally borrowed, because their home is no longer worth what it was when they purchased it. It is in the news every day. Millions of people are being displaced because of job loss, decreased income, and the inability to hold on to the asset that for so long was appreciating in value. Not many places you can go and not hear someone talking about it.
When we own our own homes, there is often a pride of ownership that makes us possessive of our property, and often we believe that our property is ever-so-much better than the Jones’ home just down the street. But I was still surprised recently when speaking with a homeowner who wanted to sell his home, and we were discussing its value, and he insisted that his home was worth $20,000 more than the identical home just down the street that had sold three months previously.
The comp home was in much better condition, something I tried to gently explain to the prospective Seller. As he politely argued with his perception of my obviously skewed comparable properties, he explained that he had done some updating that had made his home worth more than the others. When I pressed him on what he had done, he explained that he had recently put in a new toilet.
Perception is a funny thing . . .