1. Know why you are selling – The reason we look closely at why you want to sell is that your motivations play an important role in the process. They affect everything from setting a price to deciding how much time and money you will invest in getting your home ready for selling. For example: What’s more important to you: the money you walk away with, or the length of time your property is on the market? If your goal is a quick sale, that can dictate one kind of approach. If you want to maximize your profit, the sales process will almost certainly take longer.
2. Once you know, keep it to yourself – Your reasons will affect how you negotiate the sale of your home, but they shouldn’t be given as ammunition to the person who wants to buy it. For example, a prospective buyer who knows you must move quickly has you at their mercy in the negotiation process. When asked, simply say that your housing needs have changed. Your reasons are nobody’s business but your own.
3. Do your homework before setting a price – Settling on an offering price is not something that should be taken lightly. Once you have set your price you have told buyers that maximum they will have to pay for your home. The trick for the seller is to get a selling price as close to the offering price as possible. If you start out too high, you may not be taken seriously by prospective buyers and their agents. A price too low can result in selling for much less than you had hoped for.
Setting the price can be a fairly simple process. If you live in a subdivision comprised of similar or even identical floor plans, built in the same time period, then all you have to do is look at the most recent sales in the neighborhood to give you a good ballpark figure.
But many people live in older neighborhoods that have changed quite a bit over the years. Every home in your neighborhood may be a little bit different. The house next door may have added another bedroom, or the one across the street might have been built recently to fill a vacant lot. As a neighborhood evolves over the years, you may find that there are not any homes that are truly comparable to yours.
If you are selling, the most common way to set a value for your home is to look at homes that have sold in your neighborhood within the past 6 months, as well as those now currently on the market.
4. Go home shopping yourself – The best way to get to know your competition is to identify features that are popular and learn what turns buyers off is to check out open houses. Plan on spending a few weekends touring other homes on the market to learn what others are offering and their asking prices. And remember, if you are serious about selling, don’t be more expensive than your neighbor.
5. Know when to get an appraisal – Sometimes you can use a good appraisal to your benefit in marketing your home. If you obtain an appraisal in advance, keep in mind that appraisers are very good fact checkers; however, they are not good at determining how their price will coincide with your motivation.
Think about it like this; You hire an appraiser and they research the comparables for the past 6 months. They find 3 sales that are similar to your home. They provide an estimate of what it will sell for.
What did they do? They simply found three sales that match your house. They did not look at the time it took for the homes to sell, nor did they look at the several other homes that are for sale now and have failed to do so. If an appraiser finds 3 comparables, it is the agent’s job to point you in the direction of the 10 houses in direct competition with you.
How will obtaining an appraisal benefit you? – If you have an appraisal for 400,000 and you would be happy selling it for $375,000… ask your agent to market the appraisal with the property. It will show the buying public that you are already pricing it below market and they will feel compelled to make a stronger offer, thus netting you more money.
It also takes the guesswork out of the picture for the bank. If you can provide an appraisal that already justifies you price, the closing should happen with ease and take the worry of “the appraisal getting cut” out of the picture.
6. Your tax assessment means almost nothing – Some people look to tax assessments to assign value. The problem here is that tax assessments are based on a number of criteria unrelated to property values, so they often don’t necessarily reflect the true value of your home. Have you heard of two identical homes in the same neighborhood with dramatically different assessed values because one was purchased more recently than the other? Well, it happens quite often.
7. Find a good realtor – nearly two thirds of the people that sell their home say they would not do it themselves again, according to research by the National Association of Realtors (NAR). The sellers surveyed pointed to these obstacles:
■Difficulty setting a price
■Not being able to accommodate buyers in a timely fashion
■Not familiar with the process between having a contract and closing
■Many of these FSBO sellers feel like they were taken advantage of by “savvy buyers” and actually ended up negotiating on average 10% off of the selling price.
If you decide to work with a realtor, contact 2 or 3. Keep in mind the following… what are they willing to do fo you and your circumstance. Compare marketing campaigns. Look at their track records. Ask them for a list of the properties they have sold in the past. Ask them for some letters of recommendation from past clients. And keep in mind, the best agent is typically the one that provides the lowest recommended asking price for your property. Of course, you want to make sure that they can back it up with data about the neighborhood. Typically realtors with the highest price may just end up trying to “buy the right” to put their sign in your yard.