Jim Valentine: How to value the components
It can be interesting how the assorted components of a transaction take on different values depending on the timing, context and perspective of the parties. While most people focus on the price, there are many tangible and intangible aspects of the negotiation that can be the catalyst for bringing the parties together.
Common personal property items that often come in to play in real estate are the kitchen refrigerator, washer/dryer, pool table, hot tub, riding lawn mower, yard art, and tractor.
Some are heavy and a nuisance to move but cost the sellers a lot of money when purchased. Some just fit in the scheme of things and would look good if left in place. Others are helpful for maintaining or working the property. Regardless of the reasoning, they can help both parties if an agreement can be reached on the terms of their being included in the transfer.
Moving in before or after the close of escrow can help some buyers in a compromised living situation. If they are staying in a motel or their camping trailer they would surely want to move in as soon as possible even if escrow hasn’t closed. Sellers that have assembled a lot of items over their years of occupancy may appreciate time after the close of escrow before they have to move. That way they have their money in hand before they go to the expense and emotion of packing or dumping their material collection.
Warranties can get interesting. All parties want to be safe and know they are protected when they buy or sell a property. Unfortunately, there are times when there is some risk/trust involved. Proving a property corner can be interesting if the parties are trying to save money. The best way to prove is to have them marked by a licensed surveyor, but often buyers and sellers want to save money.
If the corners are easily found this is a good way to go, but what if one can’t be found or appears to have been tampered with? The only way to warrant the corner is to have it surveyed. Not an area to try to save money in our opinion, pay the professional. This can be measured as the cost of making the property saleable for the Seller, or the cost of doing good safe business for the buyer, each perspective being right for the respective viewer. This is an item of negotiation.
What is it worth to have the property cleaned of all debris per the contract? What is it worth to the buyer and seller if the buyer offers to accept the property as is with dead cars and other assorted debris strewn about? Is the landscaping in good shape or is it overgrown/dead? Was the carpet the subject of an industrial feline urine test case that the buyer is willing to dispose of? What is the value of these decisions and solutions to the respective parties? While hard to measure, they do convert to movement in negotiations for sure.
Remember the old adage, “One’s man’s junk is another man’s treasure!” when you are putting a value on components of your transaction. You can offer something that is of zero value to you yet it makes the all the difference between an acceptable or rejectable offer to the other party.
Be aware of what the other side is thinking for it may benefit you, and them, immensely if you understand their wants.
We once finalized seven months of negotiations for a subdivision property after agreeing to name the developed subdivision after the family that homesteaded the property. Immeasurable value achieved by simply using a name. Sometimes things are added and price is adjusted accordingly, but the important thing is to remember the overall picture, how did the total transaction result for the parties?
In transactions where the buyer thinks they paid too much and the seller thinks they sold too low, but there were sufficient benefits for both sides we believe we’ve achieved the perfect balance. A “willing buyer and willing seller” has been the definition of market value forever. Transactions such as those described above exemplify that definition.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. email@example.com