Last week, we were asked by a local agent to consult on one of her active listings. The house had been on the market for more than 200 days. The price had already been reduced by $35,000 and the Sellers didn’t like the idea of going lower. She brought us in to inspect the property and provide an unbiased opinion of value.
The house appeared to be competitively priced. There was one sale of a similar one story home on the street that sold for $15,000 more that the subject’s current list price. Other comps in the general area were generally supportive.
Upon pulling up at the house, we found a very nice, well-maintained brick rancher. You could even see a bit of the Schuylkill River from the back yard. Granted, it was a little bit dated, circa 1986, but there was nothing drastically wrong with the house.
That was until the freight train passed by at the rear of the property at around 35MPH. It was kind of obvious what the problem was. Freight trains…hard for any Buyer to overlook.
That was until the freight train passed by at the rear of the property at around 35MPH. It was kind of obvious what the problem was.
Freight trains…hard for any Buyer to overlook.
Our appraisal indicated an estimate of value considerably less than the current list price. We felt that the proximity to the train tracks impacted this property significantly. One of the main reasons was that this property fit into the “first time homebuyer” and “small family” markets. Buyers in those two markets tend to be more skittish when it comes to external factors such as trains and busy streets.
First-timers are concerned about making the right decision. They typically want the purchase to be low risk. Small families are worried about child safety. Without those two buyer segments the marketability of the subject is diminished, as is the value. Lower market appeal/demand equates to a lower value.
Also, the sale on the street may have placed false expectations in the minds of the Sellers. This property was updated and did not have the external influence of the train in their back yard. Having a location further from the train tracks effectively made this property more marketable to a wider segment of buyers (including First-timers and Small Families). Higher market appeal/demand equates to higher value.