If you are contemplating selling your home and are worried about “leaving money on the table” when choosing the price to sell your home at, then read on!
Most potential home sellers will start “researching” the possible price to sell their home at by hitting the world wide web and registering with a bunch of websites to start looking a homes in their town and the town where they will want to also buy their new home in. When you register with these websites, they all have some sort of estimate of what a home’s value will be so it’s easy to get lost in all the different numbers you are seeing and there are several factors as to why those numbers are NOT CORRECT! There are also a few things you, the home seller, can do to ensure you will get the maximum price for your home when you sell.
IMPORTANCE OF A REAL ESTATE AGENT’S PRICE OPINION
Let’s first talk about those estimates you see on all these websites. One thing you must understand is that the metrics for compiling that number isn’t very accurate because they take into consideration every style of home, it cannot account for condition of the home, location, or style. It also includes sales between divorcing homeowners or deed transfers into Trusts and these transfers are usually for nominal consideration – meaning the deed sale price shows $1.00 or $10.00 (anything under $100.00). So all this data gets dumped into one bucket and a price per sq. ft. is basically determined and applied to every home. So you can see how extremely inaccurate this could be. There truly is no replacement for having a real estate agent provide a comparable market analysis (“CMA”) to you. A real estate agent who is actively out showing and selling homes will have a real time understanding of the market and the trends. A real estate agent (and appraiser) will price your home according to style, number of bedrooms, bathrooms, finished basement, garage, location and condition. This is considered like-for-like (or apples-to-apples) analysis. If you have a cape style home, you cannot get colonial style price because it isn’t an apple-to-apple comparison. A real estate agent is trained to price your home according to market condition and features just as an appraiser would. It’s important to note the importance of valuing your home like an appraiser would because let’s face it, when you have a buyer who is financing the purchase an appraiser will be going out to your home and if the appraiser doesn’t agree with your price, it won’t appraise and you will have to drop your selling price to the appraiser’s number because a lender will not let a buyer pay more for a home than what the appraised value is and, quite honestly, a buyer is not going to want to overpay for a home even if they have the financial ability to do so.
CHOOSE YOUR REAL ESTATE AGENT WISELY
When deciding to sell, it’s important you interview a minimum of two real estate agents. Three would be the ideal number but I know it’s a long process of interviewing and most sellers just want to get the house listed so they usually call the agent who sold them the house (if they are still in business) or just have an agent they met at an open house come over. I cannot stress enough how important it is for you to speak with at least 2 agents. Most people think all agents do the same thing and this is soooooooo inaccurate. Just like in every profession, there are good and and bad and real estate is no exception. It still is a profession that people hone their skills. Most people think being a real estate agent is easy and anyone can do it. That may be the case for this, or any profession, but experience is invaluable. Do you want to be the seller who has the newest agent with no experience? Probably not. There are real estate agents who will “buy” your listing – meaning they will give you a ridiculously high number that your home can sell at (wrong way since no one will buy it and you languish on the market), there are agents that will give you a low number so that it’s a gamble that you get multiple offers and the price goes higher or you don’t and you actually do leave money on the table when you sell. And then there are the agents that fall in between. Those are the agents you probably want to work with. Their numbers are more accurate, the comparison is a true comparison and they work with equal numbers of buyers and sellers so they are in-touch with market trends and pricing. The agent should be able to show you similar homes that have sold. If they have other style homes, then that means they are reaching to get to a price. I see this happen time and again during appraisal problems. You also want to know what your competition will be so they should also present you with what homes are presently on the market in your price range. But the number that counts are the ones in the “sold” column because this is the number that a buyer purchased at.
Don’t overprice a home thinking a buyer will just give you a low-ball offer. That will not happen and I wouldn’t count on that happening. The buyer will just move on to the next home. A time when a buyer will low ball is when they know your home has been on the market for a long time and you’ve dropped price a few times – that’s when you will get low ball offers because a buyer will consider you a fire sale now. A seller choosing the price is a mistake that many sellers make when they choose the price they want you to list at. A seller cannot price their home without bias which is WHY you want a real estate to come in and give the un-biased fair market value opinion.
DEFERRED SHOWINGS/NO SHOWINGS UNTIL OPEN HOUSE
When we list your home, we defer showings until the open house or to a date in the near future (not to exceed 10 days). So we would list your home on a Tuesday or Wednesday which gives enough time to be sent to all the websites so that buyers see your home and put it on their list of homes to see ASAP. We put verbiage that states the home will be available to see on XX date or at the open house. This strategy is extremely successful in the strong seller’s market that we are in. It often ends with you getting multiple offers and a higher selling price.
Deferred showings vs. open house. There are 2 ways to implement the deferred showing strategy. The first, described above, which is listing your home and letting people know the date showings will commence. This strategy is inconvenient for a seller, because your entire weekend is spent away from your home due to many showings.
The other way, is the holding off showings until you have an open house. This strategy will get tons of activity and attendance to the open house because buyers have been chomping at the bit to see your property! This will also render multiple offers which, in turn, drive up the selling price. This strategy minimizes your being out of the house for entire weekend. You will usually be out for open house and a couple of hours after so that buyers can bring their real estate agents back for a look because most real estate agents can’t make every open house with their buyers.
LANGUISHING ON A MARKET COSTS YOU MORE IN THE LONG RUN
If you are left languishing on the market, this may cost you more than if you priced correctly right out the gate. If you consider that your monthly mortgage payment is $2,000.00 and you’ve over-priced your home and you do multiple price drops over the course of 3 months, and you finally get an offer that is $20,000 less than what you originally listed at, coupled with the 5 months of additional carrying costs, it’s now cost your $30,000.
The market is starting to soften and homes are starting to sit longer on the market and reduce price. Pricing is now extremely important right now because there is more inventory on the market for a buyer to choose from. Buyers, astoundingly, will still recognize when a home is overpriced so don’t under-estimate a buyer. They may go to the open house or set up a visit but definitely will not do an offer if it’s over priced.
When we list a home, regardless of a strong seller’s market or a leveling-off market, we treat it the same – with exceptional marketing, photos and service! There is no guarantee that you will get multiple offers and you have only one chance to make a first impression so you need to get it right the first time. You can trust us to do right by you from the beginning!
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