Sellers Guide to a Successful Sale

Even in a seller’s market, the price must still be right.

In a market where demand is strong and it has become more difficult to figure out how much buyers are willing to spend, how do Realtors determine the right asking price for a house?

It has never been an exact science. Supply and demand, of course, dictate asking price. Obviously, if the supply is low, the asking price will have to be adjusted upward to meet it. In general, though, the asking price is a balance obtained by considering a neighborhood and the sale prices of comparable houses within the context of market conditions.

Demand in some areas of the country is so strong that agents put up a number and someone pays it because the buyer fears that the asking price will be higher next week. Out-of-town investors often help to further inflate prices.

Some current markets have shades of the late 1980s, when property appreciation and inflation made proper pricing beyond the Realtors control.

 

Comps still count in hot market 

In a normal market, Realtors should be able to take comparable sales and come up with something that looks almost like an appraisal, with all the pluses and minuses.

Now, many Realtors look at the comparables and the competition to see how the house stacks up against the others on the market. Then they will tell the seller that they’ll look at the price again after two weeks of good marketing and re-evaluate it.

If there are no second showings or offers after two weeks, the asking price is probably too high. How the property looks, its size and location are major factors in determining asking price. Sometimes, though, the house has features that are so special that Realtors adjust the asking price upward after looking at comparable sales over the last six months to a year.

 

Builder sets new home prices 

Determining prices for new construction is totally different, because the seller is the builder, and the ones who are the most savvy about the market are the most successful.

First, the builder determines the construction costs and keeps that number to the side. Then the builder checks out what the competition is doing. This means considering the features that the builder offers and the competition doesn’t, the square footage and the builder’s specifications.

Different houses are priced based on type versus square footage and features. After coming up with a sale price, construction costs are factored in to make sure the builder is making the profit he expects.

Marketing a model home is a snap compared with marketing an existing home, because the builder is in control of the situation.

With existing homes, the houses reflect the tastes of the sellers, which may not be what most buyers are interested in. A seller’s “taste” can be a plus or a minus. If a buyer wants hardwood floors and sees that the seller has replaced them with a less appropriate and too personal a choice, then there is a problem.

Curb appeal and amenities all contribute to pricing. Buyers shop in price increments based on what they think they should be getting. If the asking price is outside the increment, the house will sit. If a buyer knows that he will get a three-car garage in the $300,000 price range and sees a house at $275,000 with the three-car garage, he’ll buy it.

By Al Heavens. Courtesy of Realty Times

There are always appropriate steps to investing in real estate and hopefully, you’ve garnered many of them right on these pages. However, there are also inappropriate steps sellers can walk down when it comes time to put their house on the market.

For instance, the seller in Parksville, who thought the half bath the builder had located at the front of the house would really be better situated toward the back of the main level (though all the other similar models had the powder room in the same place for the previous 20 years). He got hung up on this detail so much, that he just had to move it — and did — for thousands of dollars, just so he could get it on the market the “right way.” His hang-up may have settled some deep-seated emotional need for him, but it didn’t draw any more buyers, and it drained his bottom line. You might say, that was a costly mistake.

Real estate broker and author Sid Davis has identified in his book “A Survival Guide to Selling a Home,” another seven costly mistakes that many sellers make when it comes time to put their home on the market. In my business, I’ve seen each one of these mistakes played out and it just makes me shake my head as to why some sellers forge ahead with unwise strategies, instead of listening to the voice of an experienced professional.

 

The seven costly mistakes

Mistake 1: Putting the home on the market before it’s ready. Most times this happens because the seller gets impatient or is a procrastinator and has pushed himself up against a moving deadline without getting the pre-sale work done. So it comes on the market with the horrible carpet (that gets replaced during the marketing of the home); or they are painting it while it goes on the market. Presentation is everything — so get the work done before marketing the property.

Mistake 2: Over improving the home for the neighborhood. This happens with additions and upgrades that make the home stick out from among its competitors so much that it’s an anomaly, instead of a nice addition to the community.

Mistake 3: Pricing the home based on what the seller wants to net. This pricing strategy always ends in failure. Sellers can control the “asking” price, but they don’t control the “sales” price. The market does. It doesn’t matter what the seller wants, the price is determined by the black-and-white, matter-of-fact reality of the market.

Mistake 4: Hiring a Realtor based on non-business factors. Make sure you’re hiring a professional with a proven track record. It might be nice to hand over your largest asset to your nephew who just got his license — but make sure he has a mentor to keep your deal from going south.

Mistake 5: Getting emotionally involved in the sale of the home. This is one of the biggest challenges home sellers face when putting their house on the market. Once you decide to sell your house, it’s no longer a home, but a commodity. It needs to be prepared as a commodity, marketed as a commodity, and priced as a commodity. It doesn’t matter what you “want,” only what the market can bear on pricing. People are going to come in to kick the tires, so to speak, and you can’t get emotional about how they may or may not appreciate the nuances of your home of seven years.

Mistake 6: Trying to cover up problems, or not disclosing them. Most states have a property disclosure/disclaimer form — use it wisely. Just because you disclaim doesn’t mean you cannot be sued later for the leaky basement, or dilapidated heating/air system that’s discovered 30 days after settlement.

Mistake 7: Not getting your ducks lined up before trying to sell. This would involve financing, reading the fine print on your current mortgage to ensure no pre-payment penalties, not listening to the particulars of your local market, etc. If your local market is dictating lower home prices, then lower it early, not later — it will cost you more. If the local market dictates selling your home first, then buying second, do it in that order, or vice versa.

Avoiding these mistakes is not that difficult. There are plenty of resources (like this website) and professionals, who are there to help you step over the pitfalls. Do the research early, and listen to that voice in your head (it’s probably the whispers of the finance, real estate, insurance person who’s warning you of a hole you’re about to step into). Sell well.

Courtesy of Realty Times

 

Cost-effective ways to spruce up your home for a quick sale

Maybe you’ve seen the shows. A house languishes on the market and a crew of home stagers descends on the place and before you know it, they whip it into shape fast. And then what? It sells. An investment of a few hundred or maybe a few thousand dollars in a home headed for the market — a sprucing up the pros call “home staging” — can yield nice returns.

Why stage a house? Buyers can only imagine what they see, not what it’s going to be.If you don’t clean the carpet or don’t take down the flocked wallpaper or the teenager’s walls are painted bright purple, the buyer can’t envision it any other way. If done well, staging makes a remarkable difference. One home stager took over a house that was on the market for six months, didn’t change the price, staged it, and it sold in 18 days. A staging company in California claims that homes staged by their accredited students sell in an average of 42 days vs. an unstaged home’s 136 days and with an increase in sales price of 6 to 22 percent.

Whether you want to spruce up your home for your own pleasure or boost its bottom line, stagers’ advice can give your house an amazing new look. Here’s how:

Start at the street “Curb appeal” isn’t just a fancy phrase created to boost landscapers’ income. It’s a crucial first impression that can make buyers either wary of stopping to look or eager to step inside. Be sure your lawn and gardens look great, garbage cans and bikes are put away, house numbers are attractive and easy to see, the front door is spectacular (because you’ve replaced it or painted it and perhaps updated the hardware), and that you have some attractive potted plants by the door.

Remember the foyer The second first impression comes the minute a potential buyer steps inside your home. Coats on a rack, shoes underneath and keys and other doodads in a dish on a console table may mean you’re a fabulous organizer, but it’s not the way to sell a home. Put the coats and shoes in a closet, the keys in your purse and a vase of flowers on the table.

Try the 1/4 to 1/2 rule While a few homes out there have too little furniture and too few accessories, the vast majority have way too much. You don’t just want to straighten up your clutter, you want to remove it. Consider putting at least one-quarter of your furniture in storage, one-third of your books in boxes and at least one-half of your knickknacks away. Use the same rule with cabinets, closets and counters. If they’re stuffed full, buyers will think they’re too small. Keep them tidy and one-third to one-half empty (place just a few things on each shelf). Don’t forget to pare down your outside furnishings and accessories, too. A coat of paint and a little attention to accessories turned this dull bathroom into something worthy of guests.

Clean ’til you drop Or hire a cleaning crew to come regularly while your home is on the market, or at least for a one-time super-cleaning. Don’t skip windows (inside and out), behind the toilet, bathroom grout, under sinks. Actually move your furniture to vacuum behind and under it.

Arrange furnishings to highlight the architecture Take advantage of views and fireplaces. Spruce them up by framing or highlighting them, not covering them up or weighing them down. Put tall objects (furniture, vases, paintings or plants) against tall walls. Highlight, don’t block, the traffic flow. Grab a couple of sturdy friends and play with different ways to arrange your furniture. Again, pay special attention to your friends’ opinions.

Use rooms as they were intended Take the exercise equipment out of the guest room and put a bed back in. Put a table and chairs in an eat-in kitchen. Get the home office equipment and filing cabinets out of your little-used dining room and set the table for company (or just put a nice vase of flowers on top).

Fix what’s broken Buyers look for flaws to help lower the sales price in negotiations. That wobbly stair rail may still support you and the crack in the ceiling plaster may not be structural, but it’ll leave buyers wondering what else is not quite right. No matter how minor the problem, take your toolbox around and start fixing.

Update what you can Tired home is often thanks to tired paint or furnishings. A new coat of neutral-toned paint is a buyer-pleasing backdrop. Remove outdated furniture; trade sofas with a friend or relative while your house is on the market, remove yours and buy new, or store yours and rent or borrow a more contemporary style. Tired area rugs (or too many of them) detract from nice wood floors. Shag or other old-fashioned carpeting will turn buyers off. Replace it if you can; clean it if you can’t. Update a tired kitchen with an inexpensive new countertop, new cabinet doors, or even just new cabinet hardware.

Erase your personality Love Hummels? Collect fishing lures? Too bad. Think that colorful painting is quirky and fun? At least half the people who see it won’t. Box up your collections, your personal photos, and anything you wouldn’t expect to see on the floor of a furniture showroom. (Nondescript art is fine; art with attitude is not.) And put away blow dryers, makeup and toothbrushes. Buyers need to imagine themselves in your home, not wonder what its current inhabitants are like.

Invite over honest friends Ask two or three of your most forthright friends to look through your house with the eye of a home buyer: What needs changing? The smell of pets? A cracked window? Not-so-clean appliances? What’s acceptable for daily living isn’t likely to impress a buyer.

Find storage away from your house It’s tempting to shove all the boxes of extras into the basement or garage, but buyers will be looking there — judging how big they are. Make them as empty as possible by renting a storage space or borrowing a neighbor’s or relative’s garage for a while. (For last-minute things — a stack of papers, a handful of dirty clothes — you need to put away before a showing, stash them in the washer or dryer or under beds; most buyers never look there.)

Inexpensive ways to make your home shine

Once your home is listed and the for-sale sign is firmly planted in your front lawn, all is ready for would-be buyers to tour your home. Or is it?

As anyone in the real estate industry will tell you, it’s important to make your home look its best when it comes time to show it. That first impression is everything. Even if you’re in a market where homes are selling quickly and for full asking price, it’s still key to spruce up your home and prove that it’s worth every penny you’re asking. And it doesn’t have to cost you a fortune.

In fact, a great first impression, coupled with the decreasing amount of time the typical home is on the market these days, is sometimes all it takes to see a speedy offer come your way.

So, if you’re in a market with few available homes for sale, you’re probably less likely to spend a lot of money on major aesthetic improvements. But there are a lot of simple, fairly inexpensive things you can do to make a good first impression and attract offers as quickly as possible.

 

Some things you can do to ensure your home’s exterior lands favorable first impressions include:

• Stay on top of your lawn mowing and maintenance and tidy up your front landscaping. * Put a new, colorful welcome mat in front of the door.

• Embellish your door area with a nice, big potted plant to the side of the front door. * Slap a fresh coat of paint on your door.

• Move all the toys, bicycles, and scooters away from the front of the house.

• Clean all your windows until they’re sparkling.

• Invest in a new doorknob and lock—this will jazz up your door and provide greater security.

• Make sure your street numerals are polished and in place. Or, invest in a nice new set that stands out among your neighbors’ standard numerals.

• Place a seasonal wreath or arrangement on your door.

* Repair any loose shingles—the last thing a potential buyer wants to worry about is the roof.

* Paint and repair your gutters.

 

Once the exterior wows your potential buyers, you’ll need to continue to make an impact on them when they make their way inside. You can almost think of it as preparing for a formal dinner party. For starters, you can:

* Remove all the clutter – make sure kitchen and bathroom countertops are as clear as possible, try to keep toys organized in closets and shelves, temporarily remove any excess knickknacks or family photos if you tend to have a lot.

* Hang fresh clean towels in the bathrooms.

* Touch up your paint if your walls have a few rough spots. You probably already have the extra paint sitting in your garage.

* Vacuum your floor each morning. You may also want to think about getting your carpets clean before potential buyers view your house.

* Make sure all your faucets are drip-free.

* Replace any nonfunctioning bulbs in your light fixtures and vanities.

* Thoroughly clean all your appliances, including the inside of your oven and microwave.

* Place a beautiful centerpiece in the center of your dining room table.

* Eliminate odors as much as possible—place potpourri in the bathrooms, use air freshener and deodorizer, especially if you have indoor pets or there’s a smoker in the house.

* Let the light in—open all your blinds and curtains. If your house’s natural light leaves some rooms dark during certain portions of the day, turn on the lights if you know your house may be shown that day. If you have any decorative or track lighting, be sure it is on.

* Clean your fireplace.

* If you have too much furniture, place some of it in storage.

* Add some final touches, a couple of fresh bouquets of flowers and some nice potted plants in decorative containers can do wonders. Basically, just use common sense. Remember that everyone has his or her own style. You’re not trying to impress with your particular brand of décor. Rather, you’re trying to present a simple, clean, attractive home that exudes potential—an empty, yet enticing, palette for your home’s next owners.

By Michele Dawson. Courtesy of Realty Times

Slight improvements are OK, but don’t go too far

If you’re preparing to place your home on the market, it’s inevitable that you’ll need a couple of minor repairs and slight improvements before your Realtor can place a “For Sale” sign into your front yard. Practical and aesthetic projects like a fresh coat of paint drain neither time nor money and can make your home more attractive while perhaps speeding up your sale.

But what if a larger item needs repair, something which doesn’t jeopardize anyone’s health or safety—a problem of the “out of sight, out of mind” variety. Should you simply disclose it and leave the buyer to deal with the problem? Or should you fix it before placing your home on the market?

Before you make any decisions, consider that repairing the problem yourself could result in a potentially higher sales price for you. What sweet music it is to any buyer’s ears to hear the terms “new” or “just replaced” as they walk through a home.

If your house is in move-in condition, it will appeal to a wider group of prospective home buyers. First-time home buyers, and buyers with busy lifestyles, often will not consider buying a home that needs a lot of work. That is because they do not have the time or the experience to deal with the problems.

The listings that command the most attention are those that are in the best condition.If homes look sharp and are priced right, more than one buyer may make an offer. When multiple offers occur, the price may get bid up. Even if there are not multiple offers, experience has shown that a house that is in good condition will sell more quickly than one that needs work. A quick sale often means that the sales price will be close to the list price.

Another point to consider: Many if not most home sales today include the use of a home inspection clause. Depending on how it’s written, this clause can allow buyers to terminate a contract if the inspection is not “satisfactory” to them or if certain repairs are not completed.

Buyers often have the opportunity with a proper inspection clause to effectively re-open negotiations by either asking the owner to undertake repairs. Another result of an unhappy inspection works like this: The buyer asks for a discount—sometimes a very ambitious discount based on an inflated view of repair costs.

When considering minor aesthetic improvements, your decision should depend on local market conditions. Your Realtor can suggest what’s needed to be competitive and perhaps what’s not. In a hot market you may need to do nothing, while in a buyer’s market your list of repairs and upgrades may be extensive.

While not fixing up is a problem, fixing up too much—over-improving—is also an issue. The usual rule for buyers is that they purchase the least expensive home in the most expensive neighborhood they can afford. The result is that a house with too many improvements may be priced at the top of the local market, not the best place to be from a selling standpoint.

The moral of the story: You have an obligation to repair or at least inform buyers regarding health and safety hazards. For their protection—and to guard against unwarranted future claims against you—buyers should get a home inspection. No less important, the longer a home languishes in the marketplace, the more likely it is to fetch a lower price. Thus fixing up is not only good for buyers, it also may lead to a quicker sale—something beneficial for owners.

By Courtney Ronan. Courtesy of Realty Times

A dozen tips to show you how

We all have had the experience of someone important coming to the house, and whether the visitor is an in-law, old friend, or business associate you know the drill: Have the house in “show” condition.

For home sellers the situation is much the same: First impressions count and while you may not be able to tell a book by its cover, you’ll likely pay more for a book if the cover is inviting, alluring and attractive. If your home is for sale or soon to be for sale, in addition to a general cleaning there are 10 steps you can take to benefit from that all-important first look:

1. Start with the outside. Mow the law, prune bushes, remove dead branches and get rid of outdoor furniture you don’t intend to move.

2. Paint the front door and lintels, or at least clean them up.

3. Check for leaks. A drip may not seem important, but does it suggest poor maintenance in places which can’t be seen? Eliminate buyer worries and fix the little items which may be seen as clues relating to the general condition of the home.

4. Clean out closets and storage areas. Donate old clothes and furniture to local charities. This will create a sense of greater space—and mean less to move.

5. Have a professional service clean carpets. This is especially important if the carpets are to stay.

6. Caulk around tubs and sinks. New caulk invariably looks better than old caulk, and you’ll also prevent leaks.

7. Replace bulbs that don’t work and use as much wattage as is appropriate for each fixture. Bright lights make homes seem, well, light and airy.

8. Have a lot of books and magazines that you don’t want? See if you can donate to a local library, hospital or charity.

9. Is there anything in the house that will surprise visitors? As an example, mirrors in poorly-lit basements can be dangerous. Look at the property from the perspective of a first-time visitor. Things which are known to you may be uncomfortable to visitors.

10. Clean out medicine cabinets. Remove out-of-date items. Also, if you have prescription medicines, consider removing them when buyers visit.

11. People have both allergies and concerns when it comes to animals. If you have a pet, make arrangements to have it elsewhere when a home is being shown.

12. Homes in a given location and price range battle for a common pool of buyers. Ask your Realtor to examine the property for specific showing tips to make your home more competitive.

By Peter G. Miller. Courtesy Realty Times