We just closed on 3907 Saddle Trail in Parker. It was priced at $1.095 Million. As is the case with many of our transactions, there was a story behind this sale.
The Story Behind the Sale
After touring the property with Sunni Sutton, who worked with me on the sale, we knew two things ... it was going to be very difficult to price and it would take a very special buyer. Someone who not only could make use of all the property features, but was also willing and able to pay for them.
Let me start by saying, there was nothing wrong with the home. In fact, it had been beautifully updated, but it had one issue. It only had 3 bedrooms and three bedroom homes can often be difficult to sell. However, the home has a beautiful pool and outdoor living area.
Although there are a couple of very expensive homes further down the street, the homes surrounding this property are not in the million dollar range. Buyers like to have their home value protected by surrounding homes of similar values and we didn't have that here.
The first question we had in our minds was how much value we could give to the large detached metal building with offices and RV shelters. To some buyers, they might be a real asset (especially if the buyer can use them for a business like the current seller) but to others, they might have little to no value. Adding too much value here would definitely throw the appraisal off.
The second thing we had to consider was how much value could we build in for the extra land without blowing the price of the home out of the water? Two acre lots are fairly standard for this area but this home had 3.5 acres. Lots are very expensive these days but we can't give full value to the land as if it was a vacant lot because it's all attached to the home and can't be separated for a higher use. We have to discount the value or again, it throws the appraisal out of line.
Of all the things we do, pricing custom homes on acreage is by far the most challenging. We know how to market in our sleep, but getting the price right from day one is very difficult and we do this on a daily basis. It's more an art than a science because there can be so many variables.
Properties like these are especially difficult for the listing agent, buyer agent, buyer, appraiser and lender. How do you come up with a "fair" market value when there are no exact sale comparables? In cases like these, we sometimes have to just come up with what we think someone might pay if they can make use of all the features but we have to always be mindful the property still has to appraise even after it goes under contract.
We started out with a price of $1.26 MM on the property. We knew within thirty days by the lack of showings and offers that we were too aggressive. Over a 3 month period the seller reduced the price to $1.175 MM and finally to $1.095 MM. We knew we'd finally hit the right number when the activity started picking up at $1.095 MM.
Sunni and I were both holding our breaths waiting for the appraisal. The appraiser first told us he was having problems coming up with the contract price value so it was never a sure deal. But he obviously found the comparables he needed and we moved towards closing.
We ran into problems the last week before closing not the least of which was the vacant property being burglarized. But Sunni hung in there and overcame every objection by the buyer and seller one at a time. Sunni has a real gift for closing difficult transactions.
Anyway, we're thrilled to have this one under our belt and now our sellers can move on to their next ventures in life. If you're curious about the home and pricing, here's a link to the home on our site.