It is fairly common for home sellers to feel their homes have special qualities and attributes, both tangible and intangible, so they can rationalize pricing their home at a higher point than other similar homes in the area that are on the market or have sold (more emphasis on the prices of homes that have actually sold).
How can home sellers prepare themselves for the market and position their homes so buyers will see the added value in their homes and want to buy their homes at or near the asking price?
Here are a couple of suggestions:
*In advance of getting your home on the market bring in a professional appraisor to see what in his/her professional opinion the home is worth. This is a good investment whether you have no idea where your home should be priced or if you and your realtor have a big difference of opinion on what the list price should be.
If he/she comes in at or near the price you think the home is worth, then you may be spot on with the pricing.
If a buyer purchases a home with a loan, then the home is going to have to appraise at the sales price otherwise the buyer won't get a loan at the purchase price and may choose not to buy the home unless the seller agrees to reduce the price to what the home appraised at. It's possible that the appraiser assigned to the buyer's loan will come in at a different price opinion than the seller's appraiser, but at least you have a basis for where to price the home and if the appraisers come in at difference price levels, the buyer and seller can agree to split the difference in price. If I listed a home where the seller got an appraisal in advance, I would note that in the listing remarks and if I was able to connect with the buyer's appraiser which isn't always possible, I would give him/her the appraisal report as well to show what another expert in his/her industry came up with. If home doesn't appraise and buyer loves home and would otherwise agree to price, offer owner-financing.
*Offer closing help to the buyer.
*As a seller, if there are homes on the market that are similar to yours, as the home seller I would look at them so I have a feel for the competition beyond and can see for myself in person, beyond the internet, newspaper and what people tell me, how the home compares to your home. Ask yourself what you would pay for that home.
*List all of the home improvements, repairs, anything that is particularly new (i.e. a new kitchen, new windows, and new roof, so buyers appreciate the extra value.) If there are short sales and foreclosures nearby that are listed for sale, often such information is not available at foreclosure and short sale listings. So in addition to appreciating how well you have kept your home, buyers may have more confidence in buying your home than foreclosures and/or short sales.
*Make sure to point important features about the neighborhood itself and if it is near the highway/beltway, public transportation, if it is particularly close to large office buildings, medical centers. Think about and list destinations near your home that add value and may be an extra selling point for buyers.
*If you bought a new home or have a new home under contract, know how long you can potentially manage the financial obligations and upkeep of both homes (mortgages - if you don't own your current home outright and/or bought your new home with a mortgage) ,utilities, condo fee/H.O.A. fee(s) if applicable, maintenance and repairs, etc). That will help you from a financial perspective determine if it is a good decision to try pricing your home at one price point and seeing what happens for a short period of time before adjusting the price to other homes in the market, if you don't get the desired results. Talk to your financial planner/advisor.
*Agree to list your home at the price you want and if the home doesn't get much buyer traffic or any offers in the first couple of weeks, agree to reduce the price closer to market. Agree to a series of price improvements if you aren't getting desired results on your home at certain time intervals (i.e. every 2/3 weeks evaluate the situation or less if other homes are going under contract!) The worst thing that can happen to a seller is deciding to test the market and seeing if he/she can get a higher price than what other homes are selling and by the time that he/she agrees to reduce the price to what other like homes were listed for, those homes also went down in price so you are still overpriced. Talk to your realtor at least weekly for a market review.
*Monitor foreclosures and/or short sales in your area and you are concerned that buyers will offer you prices based on those active foreclosures and short sales rather than based on your homes value, then wait for those homes to sell. Foreclosures tend to be priced aggressively so banks can get the homes off of their hands. The challenge is that you never know when the next foreclosure and/or short sale will come on the market. On the other hand, to reiterate what I said above, if you have good records of the improvements and repairs to your homes, then more buyers will be drawn to your home than to the short sales and foreclosures, where you often don't have records to such information.
*Consider staging your home...which could mean moving furniture around, placing a runner on your dining room table, folded towels in the bathrooms and/or hiring a professional stager to help you. A number of stagers rent out furniture that they feel will help make your home stand out to buyers and get desired results. Consider painting rooms in more neutral colors. Replacing old worn out wallpaper and painting where the wall paper was. Depersonalize the home so there aren't family pictures everywhere. Keep it to a minimum. On the one hand you want buyers to see that you loved living in the home. On the other hand you want the home to feel like it is ready for them and want them to focus on the features of the home rather than the family portraits. The home should have a warm, cozy, well kept and classy feel that will move buyers to loving your home. And make sure your home is kept neat all the time. If you are serious about selling, your home needs to look and feel pristine, special and a great value to every home buyer who comes through it.
*Make sure your home is easy to show, whether it is a Sunday afternoon or a Tuesday evening after work, rain, snow or shine. If a home is hard to show, some buyers and realtors will decide your home is not worth the effort in coordinating showings.
In summary, if you want the list price of your home to be above what other like homes have recently sold for, I suggest bringing in a professional appraiser, preview the competition and have a plan for systematic price reductions if you don't get offers by certain dates. If you reject an offer and a second offer comes in at a similar price, I suggest you take or negotiate the offer because that tells you what multiple buyers think your home is worth. If you won't work with the second offer, then you should probably take your home off the market. Before listing your home, if you have a new home purchased or under contract, review the numbers and talk with a financial planner about the costs of owning 2 homes and how long you can comfortably do so (and factor that into when you would agree to price reductions if you don't get offers on your home). Have a copy handy of all the repairs and home improvements made to your home so buyers can see what you have done in comparison to other homes that are on the market or recently sold. If there are foreclosures or short sales that may hurt the value of your home, consider listing your home after those homes go under contract. Make sure your home shows well and is staged to feel, warm and cozy. Remember, your real estate agent is working for you. If he or she doesn't deem your home to be saleable by price and/or property condition and that you won't agree to improve either of these over time if your home doesn't get a contract, then he or she may not want to list your home.
If you or someone you know is considering selling their home and is looking for a full service agent, give me a call. All appointments are personal, professional and confidential.
Life is good!
Adam
adambashein@mris.com
www.basheinhomes.info
CALL: (301)943-4370301.718.4100 - ask for Adam
Adam Bashein
Licensed in MD & DC
Weichert Realtors
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