Do You Want to List Your Home for Sale or Actually Sell It?
Friday, September 5th, 2014 | Uncategorized | No Comments
Submitted by Karen Millikan, Owner of On The Lake Realty
Pricing your home for sale can be tricky. When looking at numbers in the hundreds of thousands, it’s easy to be blasé about 10k here or there. But take a second to sit with the idea of what that money really means. If you throw a list price at the market without proper research, you could easily miss out on a new car, a year of college tuition, a couple of luxury vacations, a down payment on another home, or even a year’s salary!
On the flip side, it wouldn’t be hard to be whitewashed by optimism and price your home out of the market entirely. No one wants to be “that house” that’s been sitting on the market for 18 months like a foreclosure!
Instead, it’s time for realism. A little up-front research and legwork to define the all-important list price of your home can help pave the way for an easy selling experience while maximizing your dollars at the end of the day. Here are some important things to consider when pricing your home to sell in today’s market.
Overpricing your home
When you price your home too high, you’re not fooling anyone. Informed buyers know the comps in your neighborhood, and if they don’t, you can bet their agent does and will share that knowledge with their buyer. If your asking price is too high, your home could sit on the market longer. The longer it sits, the staler it becomes to the marketplace. You may end up having to reduce the price – sometimes more than once. As agents or buyers flip through listings, they may simply ignore yours because the “days on market” is so high. They’ll assume something must be wrong with it and move on to the next listing. If you price your home just right from the beginning, the odds are in your favor that the final sale price will be higher than if you’d priced it too high and reduced it a few times. Plus, you’ll have saved yourself months and months of carrying costs, including mortgage payments and property taxes, not to mention months and months of keeping the home “ready to show” at the drop of a hat.
Set your price judiciously
Typically, if you set your price 5% to 10% above your agent’s suggested market price, you are likely to end up with an offer close to your home’s true value. Also, try calculating the cost per square foot of your house compared to homes already on the market (divide list price by square footage of livable space). If your house has more features or other desirable qualities, you may want to set a little higher price, but keep in mind when it comes time for the appraiser to give his value, he may not be as generous as you! Finally, follow an old retail maxim for hooking buyers: Set your price just under a whole number, such as $379,900 rather than $380,000. People search in increments of 5k or 50k in the higher end homes, so try to stay just under the next “jump” level such as $349,900 instead of $351,900. $349,900 puts you under the 350k search bracket.
Get the facts
Don’t spend money on a formal market appraisal. The best way to determine the value of your house is not to listen to all of your neighbors opinions but to get three comparative market analyses from three experienced agents specializing in your area. Not only will the agents take recent sales data and your home’s attributes into account, but they also will factor your neighborhood and active competition into the equation. If you choose to work with an agent to sell your home, select one with a great knowledge of your area, a track record of local sales, and a good marketing plan.
Work with ANY buyer
In a buyer’s market with many listings, you may be presented with a low offer. Such offers can be annoying, but consider testing the buyer’s interest by countering the offer. (The buyer could be testing you, too.) If your home is in a desirable location and in excellent condition, and the buyer is genuinely interested in purchasing a home, you have a golden opportunity to sell. Find out what the buyer really wants and shape the counteroffer accordingly. Signal your flexibility on contract terms or, if you can, offer seller financing in exchange for a higher price. What have you got to lose?
The home sale market IS improving and will continue to do so. Don’t be “priced out of the market” while your competition sells!
