In my long career selling homes in our 4-county area, I have learned so much from observing the habits of buyers as well as the art of hitting the “sweet spot” when pricing a home. The real estate market is always a moving target, tipping the balance from buyers to seller’s markets and vice-versa. The temptation today is to overprice your home because you have heard that properties are selling quickly and for over-asking in most cases. It is true that there is a shortage of inventory of homes on the market. It is also true that many homes are selling quickly for over-asking. But what you don’t hear is that an overpriced home will not only sit for a long period of time but will sell for much less than it should have if originally priced properly. So, let’s get started!
You have thought about selling and cashing in on the appreciation from prolific real estate market. You are wrestling with the challenge of change. Fear of the unknown creeps in and now it’s time to decide. Both you and your partner have now made the decision to begin a new chapter in your lives. It’s time to sell. Now what. Where do you start and how do you know where to price your home so that it brings top dollar in the shortest amount of time? What should you do to prepare your property for sale? How should you time the market so that you reach your goals? These are questions that have been asked by just about every homeowner over the last 150 years! Yes, the market has changed and prices are at an all-time high. It is true that homes are receiving multiple offers in the first week on the market. It is also the case that many homes are taken off the market with lack of results. The goal should be to have a successful sale so that you can look back and be satisfied that you succeeded in decisions that were made which led to receiving a great price on your home.
First, call a real estate professional to stop out and discuss the specific market where you live. Markets vary as to appreciation and time on the market. The agent you choose is critical to your success or failure. Make sure they know the market and have had much experience in pricing homes. Many agents focus more on the buyer purchasing your home. Ask how many listings they have had and sold in the last 24 months. A good number would be over 50. Experience is so critical to an agent’s ability to price your home based on its condition.
Condition, condition, condition is as critical as location, location, location. Today’s millennial buyers will pay a premium price if they feel the home is structurally sound and that at most some wall paper may have to go. Trying to sell a home with old faded carpeting and worn hardwood is not a good idea. These buyers will discount the price so heavily if they feel much work will have to be done. We are seeing up to a 30% discount in pricing due to cosmetic upgrades needed.
Never sell your home with a defect! A defect is described as a component of the home that adversely affects the value of the home, such as a bad basement, roof, furnace, electric or plumbing. Fix any of those areas of your home no matter what. Getting an inspection and handing it over to the buyer leaving the repair to the buyer will greatly reduce the value of your home as well as adding selling time to find just the right buyer who will accept those upgrades needed. You can always sell to an investor or “flipper”, but they pay 40 cents on a dollar.
Let the agent know what your goals are. If you want top dollar and multiple offers, change flooring, paint walls and have decent furniture in your home so that buyers feel that they can move right in with very few alterations. Your kitchen and baths should be updated and paint the interior with the colors our young buyers are looking for. Fight the urge to use colors you like as the buyer of your home will probably be 26-33 years of age. If you want to sell with putting in the least amount of money, make sure it looks clean, defects fixed and furniture to show off the interior. Your agent should be able to guide you as to pricing your home based on what work was done or needs to be done.
In summary, every home will sell and sell in a relatively short time. It just depends on your pricing. Did you put your home on the market a bit high just to speculate as the value? Selling homes is the same as cars, food and all products offered. Supply and demand are the driving forces moving the market from one side to the other. Make sure you follow your agent’s advice as to what asking price to use. You should base your pricing on the work that is needed to get you to the top spot. Subtract from the home on the top of the spectrum by the amount of work needed to become the move-in ready, cosmetically upgraded property. For example, if the top sale for a home of your square footage and location sold in the last month for $300,000, subtract the improvements needed to get to that top price. Let’s say your home needs new carpet, paint, landscaping etc., what would be the cost to upgrade that $300,000 level. Maybe $50,000-$75,000 for all the upgrades that are needed. Therefor you may start out as 249,900 if your home needs complete updating. At that price you would probably see multiple offers and buyers may be a bit easy on you after their home inspection.
If your home is priced properly for the condition and location, it should have offers in the first 5 days or so as buyers today are connected on the internet with an outline of their desires as to what price range they can afford and what location. If a buyer feels your home reflects the amount of work needed and location, then you too will walk out of your long-time home with a sense that you received top dollar in a short amount of time. If your home has been on the market for more than 3 weeks, you are not priced properly. Get a new re-evaluation to establish a correct price, hitting the “sweet spot”. If you do your research and follow the advice of your agents, you too will look back and be pleased with your results in selling your home and moving into the next chapter of your lives!