Yesterday, I started out my blog post with the implication that location is not one of the three most important factors in selling real estate, but at the end of the post, I pointed out that you can’t change the location of real estate. If location is a problem — and for some properties, it really is — then you have to change something else to accommodate it. In fact, we can change just about anything about a piece of real estate, except its location.
Sorta sounds like location is not unimportant, but rather supremely important, does’t it?
That’s what’s been bugging me about the post I put up yesterday.
Let’s step back a minute, and tear this apart a bit at a time.
First, the location of a piece of real estate is actually part of one of the three most important factors in selling real estate. Those three factors are product, price and packaging (also called “staging”). Truthfully, those are the three most important factors of selling anything, not just real estate. It’s just that in real estate, there’s the added element of location that’s not always a factor in other products. The “product” is what we’re selling: what it is, where it is, how it is.
We balance those three factors — product, price and packaging — so that we can achieve a seller’s goal: highest price in the shortest time with the fewest challenges. If the product is lacking in some capacity or another, we have to fix it somehow. Sometimes, we can physically fix the product (what it is and how it is), but sometimes, such as with a poor location, we can’t. Then, we have to rely on adjusting the price or the packaging.
Now, all that being said, is location not important or critically important? It depends on your perspective.
If you absolutely refuse to live in a house that backs to a major roadway, it doesn’t really matter what the price is; you’re not buying that house if it backs to a major roadway. In this case, the location trumps everything else, and is THE most important factor.
There might, however, be a point at which you’d find yourself bargaining: “I’d live on a major road if I could get a big enough house for cheap enough.” Notice what just happened? The price was adjusted — downward — to make up for the product’s shortcomings. You balanced one against the other. Location wasn’t THE most important factor. Frankly, it usually isn’t, because the price can be adjusted. In the end, just about any shortcoming can be — and usually is — “fixed” with a price adjustment. In the end, it all balances out.
That’s what I was trying to get at yesterday.
The product/price/packaging balancing act is what I was alluding to yesterday, but never fully fleshed out. In the scenario I was talking about, the seller was not acknowledging that the market is looking for a balance between product and price (the packaging was already about as strong as it can be). The seller, on the other hand, wants the market to ignore the property’s shortcomings, and value it as if its location were not an issue. Given a better location, the product and price are probably in balance. In its actual location, they are not, and it doesn’t matter what the seller thinks, wants or needs. It doesn’t even matter what Zillow says.
The market will speak, and the wise seller will listen.
Even in a strong seller’s market.
Of course, if you need any assistance with any of this, I’m just a click or a call away. Don’t hesitate to reach out. I’m here to help, if you just let me know what you need from me.
With warmest regards,
Randall Brennan, REALTOR
Certified Negotiation Expert
Certified Investor Agent Specialist
Certified Distressed Property Expert
Certified Military Housing Specialist
So what’s next? Take your pick.