The Pricer per Square Foot Argument

As I go another listing appointment I know the first question that will be asked: HOW MUCH IS MY HOME WORTH? Of course that is the most important factor our sellers look at when deciding to sell their home and of course which realtor to choose. I lost a listing last month because the seller held me to a price that was said as part of a lengthy discussion on marketing the property. Side-note: This home in question is in my neighborhood where my real estate partner and I have lived for over 12 years. We have had the most resale transactions in the neighborhood for the last 4 years! Back to the story: I gave him a quick number with the comment "If you want to sell it quickly". To this day he took that number, held me to it, and hired another agent two weeks later. However the seller does not seem to remember that our discussion continued. The seller had taken price per square foot of recent sales and arrived at a much higher price. We discussed this and I said he had a very valid argument. At the end of the discussion the seller said he wanted to list it for his amount and I said we could do that and see how the market reacts. Quick history of the home: •Built in 2005 •Approximately 3675 square feet plus unfinished basement •Went into foreclosure in the summer of 2013 •Overall good shape for a foreclosure •Listed, in foreclosure, for $327K, lowered to an auction price of $289K after 6 months of being on the market! •Present seller buys home in foreclosure auction for $284K •Present seller puts approximately $10K to 20K in work on home. •Present seller wants to list it at $399K! •I bring him an offer, before it is listed, at $389K, with $11K in closing cost. Seller turns offer down. Says he wants $10K more Here is my point: We cannot base the price of a home exclusively using a price per square foot model. In this particular case the home did not sell in foreclosure at a much lower price. It had to be sold at auction. Why is it going to miraculously sell now, over $100K higher than auction price, because the seller has cleaned it up? The home is located in a part of the neighborhood that is in lower demand than in other parts. It does not have a golf course or lake view that most buyers want in our neighborhood. When pricing a home you need to know the history of the home, its location in a neighborhood, and other subjective criteria, before pricing it. The price per square foot is a great start but it is not the ultimate determining factor!