Determining the value of a luxury home on a lakefront can be a challenging task for many. Still, there’s no secret that property values are more widely available now than they ever have in the past. So how do you go about calculating the value of your lakefront home? As it turns out, the resources that can help you out are all quite easy to find and use yourself. Without further ado, let’s get started!
Run a comparative market analysis
Luxury homes naturally come with more variables in their construction style, amenities, size, and floor plan than other homes do. That’s why it’s important to get a feel for the housing market in your area and collect the numbers on what comparable properties are selling for. A comparative market analysis (or CMA) is one of the best ways to get an early appraisal of your home’s value.
A CMA will narrow down the number of homes in your area that contain similar benefits and bonuses that luxury home buyers are looking for. Homes on a lake or homes with spectacular views or a secluded location can all contribute to a higher valuation, for instance. A local real estate agent is a great resource at this step since they’ll have more insights on the long- and short-term pricing trends for lakefront homes in Lake Geneva real estate or elsewhere.
Get an appraisal (or two or three)
It’s all good and well to estimate your home’s value based on market comparables, but you may eventually want to hire appraisers to arrive at a more definite figure. Every appraiser has their own means of calculating value, so it’s a good idea to get two or three and have a wider perspective on what you can expect.
Not everyone buying and selling luxury real estate decides to hire an appraiser for this step, however. In fact, many real estate agents can help just as much. Contact your agent and run through the pros and cons of your property. From there, you can determine a realistic listing price that’s priced to sell on your schedule and on your budget.
Consider a few upgrades
Boosting the value of a luxury property is actually a rather cut-and-dry process. Not every luxury buyer is looking for the same types of amenities, but there are certain upgrades you can do to appeal to the maximum number of buyers. These include:
Investing in high-quality materials like marble, durable wood, and stainless steel for high traffic areas like the kitchen and entryways
Maximizing your lakefront view by renewing your landscape and curb appeal with fresh greenery and plantings
Installing high-tech appliances for your oven, entertainment systems, HVAC, and smart technology like remote hubs that control internal temperature, locks, and electricity usage
Moving in antique furnishings or classic furniture and artworks
Develop a pricing strategy
There are conflicting notions in real estate about how to best approach pricing a luxury lakefront home. On the one hand, some agents prefer to overprice in order to have an advantage when buyers are numerous, and a bidding war is likely. A higher-than-average listing price can also sometimes attract exclusive buyers whose buying range may fall outside most buyers’ budgets.
Underpricing a luxury home also carries several advantages. Since most buyers use the internet first when surveying homes to buy (97%, according to the National Association of Realtors), it’s important to list your home competitively. What’s key to understanding is whether your local housing market favors buyers or sellers.
Underpricing can be an effective way to generate buzz when there are more homes for sale than there are buyers. In this strategy, multiple potential buyers will usually increase their best and final offer in order to be competitive. As always, contact your real estate agent first for the best advice on how to price your luxury home.
It comes with the territory: luxury homes are generally more unique and custom-made than the majority of the properties in the market. That means that buyers are likely going to come to the negotiation table with several unique needs that they’re looking to fulfill in a given home. Luxury homeowners should therefore be flexible with their pricing at the outset of the journey.
Being polite, knowledgeable, and empathetic with potential buyers during open houses is one key to ensuring that your home is generating buzz and good feedback in the local market. This is especially important with luxury properties because the number of buyers will be lower than average, and the time between showings can be extensive.
If you’re not receiving many offers or visits, it could be a sign to lower the listing price. Above all, be attentive to what’s happening at comparable homes in your area: pricing trends can change at a moment’s notice, and it’s always a good idea to stay on top of them.
Context is key
The location, amenities, appliances, and bonus features of a luxury lakefront home all contribute to its unique status on the housing market. Every luxury home brings its own pros and cons to the table, so it’s worthwhile to be realistic about the attractive points of any given house. Assess the location first of all: a home nearby big cities may fetch closing prices roughly equivalent to those in the suburbs that are much more spacious.
Next, be honest about the curb appeal, upgrades, and age of the house too. Luxury home buyers can be rigorous with their offers and avoid negotiation, especially if there’s a lack of comparables in the area, so your pricing strategy needs to be on point. Stay in touch with your real estate agent throughout the process to ensure that you’re presenting the property in the most flattering light.
Get in touch with a local real estate agent today!
Any questions or comments about Lake Geneva luxury lakefront properties or Lake Geneva real estate more broadly? Contact Donna Brongiel today!