During the sale of “Santa Maria Nuova”, Stefano Petri, the Great Estate Network CEO, managed the vendors. His considerations about how it was possible to reach this important goal signed GE: the fundamentality of cutting-edge tools of the Group as The Best Price, and The Best Redemption, and lot more.
The vendor of “Santa Maria Nuova” (discover the property here): Mrs. Milena Bono, a loyal client of Great Estate, as well as a dear friend of mine. We sold her first home in Sarteano in 2010 and to a US university teacher. Through that sale, Milena and her dad, Mr. Persival Bono, purchased “Santa Maria Nuova”, a farmhouse located in the complex named “Le Coste” of Città Della Pieve.
Milena and her dad renovated the old granary. The building has then become the main home of Milena and her mother, while the main farmhouse was used as touristic accommodation with great results.
Given the strong friendship with Milena, she has always given us an exclusive assignment for sale. She also has constantly shared with us all those marketing plans that could allow the reaching of the highest visibility possible to her property, the one that Great Estate is able to offer to its clients.
In the beginning, Milena and her dad’s will was to sell the whole property united: so, the guesthouse where Milena lived, as well as the farmhouse where the touristic business was held.
We started the advertising of the home in 2016. Despite our estimate of about € 1,000,000.00, the requested prices were:
As you can see, in 2016, the requested value was € 320,000.00 higher than our estimate: a 25% gap between the estimate and the requested price.
Thanks to one of our innovative tools, The Best Redemption, we know that – with a so huge difference – every kind of advertising and/or structure will not be able to reach the best goal.
If you want to discover the reasons, read this article very carefully. Here I explained this subject in detail.
Moreover, even if the price requested in the period 2016-18 was reduced to about € 165,000.00, the difference between the requested price and the estimate remained basically the same: over 25%. Indeed, even if the price has been cut down by about 15% since 2010 to date real estate values have decreased by about 5%/year.
So, the requested price has reduced but, in the meantime, the value of the house has decreased too.
This is the greatest problem we could have to face in case the vendors “try” to enter into the market their property with a requested price of a 10% value higher than its real market value. Inevitably, every price adjustment will not be sufficient to fill the initial gap and the decreasing of the value property during the year.
Moreover, a property that “remains” on the market for many years loses its appeal and, instead, is seen and recognized by the buyers who will ask themselves:
“What is wrong with that property?”
“if there is nobody willing to purchase it, why should I!
“surely, the requested price is out of the market. I can see it through just the normal comparisons… the seller wants to joke with the buyers’ market, so with me too… if you would have to start a negotiation I would have offered the half of the requested price, that’s will teach him/her!”
I analyzed those mechanisms in this specific article that I invite you to read carefully in order to better understand how to reach the best result possible with the sale of your charming property.
That said, despite the requested price – too high if compared to the estimate – I was sure that the offer we were presenting to the market and composed of a large farmhouse and a guesthouse would have not represented an interesting choice for the market. I knew that the only solution in order to sell the whole complex was to decrease the selling price.
In 2017, I proposed to Milena and her dad two options:
- The first was to keep selling the farmhouse and the guesthouse together, but at € 950,000.00;
- The second was the one of dividing the property into two different real estate proposals:
Guesthouse and 2,500.00 sqm of land at about € 370,000.00, and the farmhouse with swimming pool and 7,500.00 sqm of land at about € 750,000.00.
This would have allowed them to potentially reach a total value of about € 1,120,000.00 and not just the € 950,000.00 they would have obtain by selling the whole complex together.
I thought a lot about this second option too. I knew that, even if it was the most convenient by an economic point of view, I could not have known which one of the two houses would have been sold for first and how much time it would have taken us to sell the other and, especially, how would the vicinity of the two properties would have affected the estimates.
I have to admit that, in this situation, our “The Best Price” system helped me a lot: it gave me the possibility to analyse the qualitative variables with huge precision. In this way, it gave me also that strength I did not have.
Unfortunately, in 2017, this proposal was not accepted immediately. This was also because of many agencies that were trying to convince my clients to know some (inexistent) buyers who were really interested in purchase the house at highest values.
Situations like this one often happen and they are really dramatic for those who want to sell.
Unfortunately, some buyers make promises that, sometimes, are not respected.
Personally, I always say to the vendors that a potential buyer who does not consider high the requested price is a client that, in 99% of cases, will not purchase.
Another sore subject: the agencies that affirm to have clients of the same level and that say to the vendor “I can sell your property within three months with this price..”. you should always doubt who has this mentality for the negotiations.
I do not consider myself special, nor that Great Estate is unwinnable. However, in more than 25 years of activity, only 3-5% of cases the buyers have offered the total price, while in the 100% of these cases the requested price was absolutely In line with the value of the property.
Thanks to those people, Milena, her dad, and I have wasted some precious time.
Finally, in June 2018, Milena and her dad decided to follow my suggestions.
Talking about the dependence, Milena accepted my estimate and we entered it into the market at about € 395,000.00 – our estimate was of € 375,000.00.
The result? As you can read in this article, we were able to find the right client in just a few months!
Instead, regarding the main farmhouse with swimming pool, before adjusting the price to the estimate proposed, it was necessary to wait a bit more: this has inevitably brought to a further contraction of the values.
For this reason, in July 2019, we have to modify the estimate of the farmhouse: from € 750,000.00 to € 630,000.00. This was both because a real estate values decreasing and the state of maintenance of the farmhouse itself.
Finally, in November 2019, Milena and her dad decided to change the price of their property by adjusting it to our The Best Price estimate. The consequence of this choice is proved by the following graphic.
It is clear that from July 2018 to November 2019, the views to the farmhouse were not sufficient to be considered a base for a concrete sale.
Instead, since November 2019 while we were in Winter and, in a few months, in the Covid-19 emergency, the farmhouse performances, month by month, overcame the red line: the one of the minimum views number. This is precisely how it is possible to create the right base to reach “the sale”.
Indeed, a tot number of views of a property brings to a tot number of clients asking for information. Then, it brings to a tot number of clients doing a real visit to the property, so to a tot number of negotiations and… to the property sale! Do you know the price?
€ 625,000.00: a value perfectly in line with our The Best Price estimate that identified in € 630,000.00 the property value.
WELL. WHICH ARE THE CONCLUSIONS THAT WE CAN TAKE FROM THIS ANALYSIS?
- The first, important certainty is that our innovative tool “The Best Price” is able to identify with huge precision the best price for every property by proposing an exact estimate scenario.
You that you are willing to sell your home, pay attention not to give it a subjective estimate: every owner – I included, despite my 25 years of activity – overestimates his/her property (in this regard, read this article).
- The second, even more important, is that our innovative The Best Redemption is able to identify the market’s grade of appreciation in your home. This will allow you to do whatever adjustment needed for a rapid sale of your property with the security that selling soon means selling better, especially from an economic point of view.
- The third – that includes the previous too – is the strong awareness that the more your property remains on the market the most it loses its value. So, the best moment when to sell your home is TODAY, not tomorrow. Because tomorrow, unless real estate properties will be able to reach a higher estimate (something very hard if considered the national and global economic situation) the value of your home will be compromised.
SO, WE CAN AFFIRM THAT THE BEST PRICE ESTIMATE AND THE BEST REDEMPTION ANALYSIS ARE VERY IMPORTANT TOOLS.
I am sure that these tools and all the other created and developed by Great Estate are some incredible PLUS and not just for us as professionals, but especially for the vendors who, thanks to them, can obtain a perfect analysis of the “non-sale” reasons.
It is not easy to adequate our own convictions to some so innovative tools. However, Darwin says:
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
Today, you, like the rest of the GE clients, may have the possibility to decide if keep believing in those comfortable answers that will give you some passing satisfactions only or being actively present to the changing done through cutting-edge tools and that will allow you to reach the best result possible.
THE CHOICE IS NOW YOURS!