7 Pricing Myths to Stop Believing If You Ever Hope to Sell Your House
Pricing your own home is hard. Of course, you want to make a profit. Of course, all that money you spent installing a swimming pool or a half-bath will be recouped, because you’re leaving your digs in better shape than when you bought it, right?
Well, not necessarily. Too many home sellers fall prey to myths about home pricing that seem to make sense at first, but don’t jive with the reality of real estate markets today. To make sure you haven’t bought into any of this—since the buyers you’re trying to woo sure haven’t—here are some common pricing myths you’ll want to rinse from your brain so you kick off your home-selling venture with realistic expectations.
1. You always make money when you sell a home
Sure, real estate tends to appreciate over time: Home prices increased by approximately 5% by the end of 2017 and continue rising 3.5% in 2018. But selling your home for more than you paid is by no means a given, and your return on investment can vary greatly based on where you live.
2. Price your house high to make big bucks
We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you’ll soon come back to Earth when you realize that an overpriced home just won’t sell.
While the payday might sound appealing, you’re actually sacrificing your best marketing time in exchange for the remote possibility that someone will overpay for your home.
RELATED: Home Won’t Sell? Check The Price
While certain buyers might be suckered in, this becomes far less likely if they’re working with a buyer’s agent who will know all too well when a home is overpriced, and advise their client to steer clear. And this can lead to problems down the road (as our next myth indicates).
3. If your home’s overpriced, it’s no big deal to lower it later
Sorry, but overpricing your home isn’t easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months make buyers presume that something must be wrong. As such, they might still steer clear, or offer even less than the price you’re now asking.
Bottom line: Price your home appropriately from the beginning for your best shot at having a quick and easy sale.
RELATED: The Importance of Proper Pricing
4. Pricing your home low means you won’t make as much money
Similarly, sellers are often leery of pricing their home on the low end. But as counterintuitive as this seems, this strategy can often pay off big-time. Here’s why: Low-priced homes drum up tons of interest, which could result in a bidding war that could drive your home’s price past your wildest dreams.
5. You can add the cost of any renovations you’ve made
Let’s say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell—after all, your home’s new owners are inheriting all your hard work.
The reality: While your renovations might see some return on investment, you’ll rarely recoup the whole amount. On average, you can expect to get back 64% of every dollar you spend on home improvements. Plus that profit can vary greatly based on which renovation you do.
6. A past appraisal will help you pinpoint the right price
If you have an appraisal in hand, from when you bought or refinanced your house, you might think that’s a logical place to start to price your home. It’s not!
An appraisal assigns your home a value based on market conditions at a specific date, so it becomes old news very quickly. In fact, lenders typically won’t accept appraisals that are more than 60 days old because lenders know markets can change quickly.
7. Your agent might overprice the house to make a bigger commission
Don’t even go there.
While it’s true that an agent’s commission is based on the selling price of a house, the disparity will end up being negligible. For example, the difference in commission between a $300,000 house and one that’s $310,000 is about $150.
No real estate agent is going to lose a sale for the sake of a couple hundred dollars.
Do you have any home selling myths to add to our list? Sound off on The Patrick Parker Realty Facebook Page or our Twitter feeds. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
How to Interview A Listing Agent
Is interviewing a Real Estate Agent such a daunting task?
Too many people rush into choosing a Listing Agent. Once the idea of selling pops into their minds, they may choose the first Agent that crosses their path, whether via postcard, a Facebook Ad or billboard. In fact, 72% of home sellers contacted only one Real Estate Agent before deciding on the ‘right Agent’ they like sell their home through.
The big question here is how does one avoid choosing the wrong Real Estate Agent for the job?
Either you interview a Real Estate Agent and decide to hire him right there and then; or you opt to interview a couple of Real Estate Agents. Whichever route you as a home seller decide to take, make sure you have prepared at least a handful of questions, which should quickly determine whether your decision to hire that Real Estate Agent was the good one (or not)!
Most Real Estate Agents will not expect you to be asking these types of questions!
FREE DOWNLOAD: The Ultimate Home Seller’s Guide
This list of 10 questions to ask when interviewing a Listing Agent will come in handy in separating the wheat from the chaff:
Question #1: How long have you been a Real Estate Agent?
As much as enthusiasm and passion a beginning Real Estate Agent might bring to the table, when it is time for contract negotiation, it will be the (negotiation) experience of the Agent which will bring the deal to a successful close!
The more contracts a Real Estate Agent has written over the years, the more experience he will have in detecting, avoiding, preparing, anticipating potential pitfalls! As any experienced Real Estate Agent can attest, there’s no such thing a ‘simple contract’ – every contract is unique and will require a customized legal frame work, making sure the terms and conditions of the deal are ironclad!
Of course, you’ll always have these superstar Agents who are making a killing in their first year of real estate, but those are the exception to the rule!
The other nine questions below will filter through whether you’re dealing with such a super-talented Agent or just a fly-by-night individual!
Question #2: How many real estate transactions did you close last year?
This might perhaps be seen as a rude or inappropriate question to ask if it were asked in any other field than real estate.
Real Estate Agents are always talking amongst one another about production numbers, as it’s an integrate part of their business models, annual goals, and getting more business!
Whereas the abstract figure won’t necessarily tell you a lot (other than give you a rough idea how much commission the Agent made), it does give you an idea of how active the Real Estate Agent is.
It might be tempting to look at the total number and use it as the sole measuring stick on how successful the Agent was, but one needs to put it into perspective:
The Real Estate Agent who sold the lower number of properties over the past 12 months might not immediately be your first choice, neither should the Agent who sold 50 properties in a particular year.
And why might that be?
Agents who give the highest listing price, do get a lot of business from home sellers, who don’t necessarily know any better, until it’s too late and the property has been exposed to the market for way too long! The overpriced properties you see lingering about for months on end, and plenty of expired listings are proof of that.
In other words, the ratio of houses the Agent eventually sells versus the (overpriced) properties that he still has on the books (which is called the sales-to-listing ratio) will be an important number to watch.
Thus, while not immediately evident by hearing a raw number, put into context, it is very revealing who is the better Agent: a Real Estate Agent who sells 16 out of his 20 listings compared to another Agent who sells 35 out of 70 listings!
Question #3: Is being a Real Estate Agent your full-time job?
There is this misconception that being a Real Estate Agent must be such an easy job, which offers lots of free time, days off, and can make you bundles of money. But if you interview a Real Estate Agent who’s been around the block, you will more than hear something completely different!
While one might initially be going through training and learning the ropes on a part-time basis, providing a professional service to your clients does require a full-time Real Estate Agent.
How is the part-time Agent going to handle all the incoming viewing requests, specific property inquiries by home buyers or property valuations for home sellers if he’s too busy working another job?
Nevermind what might happen if there’s talk of writing an offer at the ‘wrong time’ for this part-time Agent. Time constraint? Availability? Imagine as a home seller to be losing such an interested home buyer because the (part-time) Agent’s agenda can’t accommodate!
Needless to say, hiring a part-time Real Estate Agent is not advisable!
Question #4: How often can we expect feedback from you?
Perhaps the line of questioning ought to go in the direction of who will be providing the feedback!
Is the Real Estate Agent working on his own, together with a personal assistant or is there an entire team behind the scene? And more importantly, who will end up being the person you, as the home seller, will get all the feedback from?
It’s only normal for a home seller wanting to know what the home buyers have been saying about their property during the viewings over the course of the week. Most well-oiled teams have this part covered with a feedback system to make sure the home seller gets proper, timely information about buyer feedback!
Not only before the property is sold, but also during and afterwards, it’s vital for the Agent to keep the home seller in the loop of where they stand in the process: is a home inspection due or is the bank appraisal taking place soon? Plus, will the Agent be present during those activities as well?
Each of those events, as small or big as they may be, requires feedback to the home seller. This is where a professional Real Estate Agent (and/or team) stands out from the crowd! There’s no such thing as too much feedback!
Question #5: How do you normally communicate with your clients?
Depending on how the Agent responds to the previous question, you’ll lead right into this one.
Once you’ve established the frequency or timing of the feedback, you need to figure out which communication medium your Agent uses with other clients.
When you interview a Real Estate Agent, you need to make sure to inform the Real Estate Agent of your preferred method of communication!
Some people are stuck on a personal phone call following every showing appointment, others might be too busy and rather prefer you to send them a text message or email them a summary of what happened during the viewing.
Having said that, one of the biggest complaints people have against Agents is the lack of communication.
If an Agent happens to be in a client meeting and can’t pick up the phone, we all know that those things happen and a return call afterwards will set everything straight. However, I’m referring to the blatant lack of respect on part of a lot of Real Estate Agents who believe returning phone calls the same day is something of an unnecessary luxury. This Agent is in control of the sale of your life’s most expensive asset, so the least he can do is treat you with respect by returning your call(s) ASAP!
Question #6: Can you provide us with a recent list of client references?
There are pretty much two options you could go with:
(1) ask the Listing Agent for a list of recent client references, which is something he’ll more than likely have written out on a personal testimonial page on his website. You can also check sites like Zillow and Google for online reviews that the Agent cannot filter.
(2) maybe a better option would be to request the details of the last few homes he sold and consequently contact those people yourself. It might take a little bit more time and effort, but the feedback you’ll get from these previous clients will more than likely be quite informative, and more importantly, be unprepared by the Agent!
Question #7: How did you determine the asking price of our home?
Here, you have a couple of popular ways to arrive at the market value:
The most commonly used method (as well as the best one) is the Comparative Market Analysis (CMA), which allows the Agent to look at the recently sold properties in your immediate vicinity, as well as the current properties for sale, all within a similar size, look and price range, in order to arrive at a fair market value!
RELATED: The Importance Of Proper Pricing
As you interview a Real Estate Agent, nothing stops you from asking him to show you some proof regarding the CMA’s conclusions.
Question #8: Will you personally be taking pictures of our home?
How often have you browsed a property portal and come across some incredibly bad pictures? What was the Agent thinking? And how did the seller approve that marketing material?
This makes you stop and think who could have possibly have taken those unprofessional photos?
Whereas there are Agents who have particularly good photography skills and appropriate equipment to present your home at its best, the majority of Real Estate Agents don’t.
The importance of having great photos as part of your marketing cannot be stressed enough!
Bottom line: unless this Real Estate Agent is half a pro at taking real estate photos himself, insist on a Professional Real Estate Photographer.
Question #9: Which advertising tools will you be using to market our home?
Besides the traditional advertising tools, such as ads in newspapers, magazines, postcards, billboards etc., any decent Real Estate Agents needs to have a strong online presence.
Marketing should be happening all over! Your property needs to get exposed to as many potential home buyers as possible!
As a quick reminder, 90% of the home buyers start their home search online!
RELATED: Your Unique Marketing Plan
The internet is where all the researching and reading up happens, months before the home buyer even contacts the Agent!
Through the Agent’s online activities across many social network platforms, his personal website, and an active blogging calendar, chances are very good that the home buyers will keep running into that Agent’s content during their information-gathering phase. And who will they more than likely be contacting to help them find homes for sale on the Jersey Shore once they’re ready? After all, without even having met the Agent, these home buyers already have quite the impression of him due to this dominant online presence!
Question #10: Do you provide any additional services?
Sometimes it’s nice to know whether the Agent can offer you something different from the other Agents.
Any experienced Agent will immediately suggest helping out with the presentation of your home: from the cleaning & decluttering, to some of the needed repairs to the house, to getting that garden up-to-date, with extra attention pruning the shrubs & trimming the lawn.
Provided that the Agent has been working in the local area for many years, he’ll be able to set you up with a list of vendors as well, ranging from local handymen, attorneys, moving companies, to name but a few.
Keep in mind that the better Agents have your best interest at heart and don’t mean anything personal or hurtful if they point out potential negatives throughout the house.
The Real Estate Agent’s advice shouldn’t be taken lightly, as it is in their interest as well to have a more desirable and saleable product to present to buyers!
Have you recently interviewed a Listing Agent to sell your home? What did you learn? Did you rush through the process with regrets? Share your story on the Patrick Parker Realty Facebook Page, on our Twitter, Instagram or LinkedIn feeds. And don’t forget to subscribe to our monthly HOME ADVICE™ eNewsletter for articles like this one delivered straight to your inbox.
Mega Tips for a First-Time Home Seller
Homeowners don’t generally think about filling the shoes of a first-time home seller until they decide to buy a new home. Usually, the motivating factor is the need to move — due to work-related issues or the needs of a growing family — and that generally involves buying another house. It’s when the homeowners stop to consider the move that it may dawn on them, yes, because they need to sell, they are now a first-time home seller.
FREE DOWNLOAD: The Ultimate Home Sellers Guide
Selling a home is very different from buying a home. Whereas buying a home generally involves emotions and feelings, selling a home typically centers on what listing agents like to call maximizing profit potential.
Here are the key steps to keep in mind as a first-time homeseller to sell your home fast and for top-dollar:
1. Price Your Home Accurately
To price your home accurately you need the assistance of a reputable Listing Agent. This is not the time to choose your cousin’s sister-in-law, for example, who dabbles in real estate. You’ll fare much better if you select an experienced real estate agent who sells a fair number of listings, preferably in your neighborhood.
RELATED: What’s My Home Worth? Find Out Now!
Your Agent will analyze comparable sales and prepare an estimate of value often called a CMA, for comparative market analysis. It is OK to use real estate websites to get an idea of this figure, but you’ll soon learn the variances your agent will point out because your they have the experience and education to provide you with a more accurate opinion of value.
2. Prepare Your Home For Sale
Ask your Listing Agent to advise you on preparing your home for sale. Most homes show better with about half of the furniture removed. If a buyer walks in the door and wonders if anybody lives in the house, you’ve done your job correctly. Consider home staging to boost your selling power and appeal.
Painting is the single most effective improvement you can make. Don’t let dings in the woodwork or scraps on the walls make your home reflect deferred maintenance.
3. Be Flexible with Showings
If home showings are too much of an imposition, consider going away the first weekend your home is on the market. Yes, it can feel a bit intrusive to allow strangers to trek through your home and check out your soft-closing drawers in the kitchen. The best way to sell your home is to let a buyer inside with her buyer’s agent to tour in peace and quiet.
Leave the house when buyer’s agents show up. Anything you say can and will be used against you, plus, buyer’s agents prefer to show without interference
4. Allow An Open House
Not every home is a viable candidate for an open house. If your home is located in an area close to major traffic, that is generally indicative of a reasonable expectation that the open house signs will pull in visitors.
Ask your Listing Agent if they advertise the open houses online. Many a home buyer has had no desire to buy a home until she spots an open house and subsequently falls in love.
5. Review Your Listing Online
Look at your home listing on various websites to make sure the information conveyed is accurate. Agents do their best to ensure accuracy, but since it is your home, you know the details better than anyone. If you spot a feature that is missing, contact your agent and ask for an inclusion.
6. Try to Respond Promptly to A Purchase Offer
Many offers contain a date by which the offer expires. Notwithstanding, it can drive buyers crazy if they are forced to wait for a seller to decide whether to accept their offer or to issue a counter offer. Remember, if you are selling because you need to buy a new home, you are no different when you are a home buyer yourself.
7. Line Up Your Movers Early
If you are thinking about moving during the summer, for example, which is a very busy time of year for movers, you might find it is impossible to locate movers for the day you want. You can start packing before your home hits the market, which will give you a head start on the process. It will also give you peace of mind to be prepared. Selling can be stressful enough.
Are you a first-time home seller? What tips do you have to add to our list? Sound off on the Patrick Parker Realty Facebook Page or our Twitter, LinkedIn or Instagram feeds. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
5 Reasons You Should Never Buy or Sell a Home Without a Real Estate Agent
You’re DIY’ing this real estate thing, and you think you’re doing pretty well—after all, any info you might need is at your fingertips online, right? That and your own judgment.
Oh, dear home buyer (or seller!)—we know you can do it on your own. But you really, really shouldn’t. This is likely the biggest financial decision of your entire life, and you need Real Estate Agent if you want to do it right.
1. They have loads of expertise
Want to check the MLS for a 4B/2B with an EIK and a W/D? Real estate has its own language, full of acronyms and semi-arcane jargon, and your Real Estate Agent is trained to speak that language fluently.
Plus, buying or selling a home usually requires dozens of forms, reports, disclosures, and other technical documents. Real Estate Agents have the expertise to help you prepare a killer deal—while avoiding delays or costly mistakes that can seriously mess you up.
FREE DOWNLOAD: The Complete Home Buyer Guide
2. They have turbocharged searching power
The Internet is awesome. You can find almost anything—anything! And with online real estate listing sites such as yours truly, you can find up-to-date home listings on your own, any time you want. But guess what? Real Estate Agents have access to even more listings. Sometimes properties are available but not actively advertised. A Real Estate Agent can help you find those hidden gems.
Plus, a good local Real Estate Agent is going to know the search area way better than you ever could. Have your eye on a particular neighborhood, but it’s just out of your price range? Your Real Estate Agent is equipped to know the ins and outs of every neighborhood, so she can direct you toward a home in your price range that you may have overlooked.
3. They have bullish negotiating chops
Any time you buy or sell a home, you’re going to encounter negotiations—and as today’s housing market heats up, those negotiations are more likely than ever to get a little heated.
You can expect lots of competition, cutthroat tactics, all-cash offers, and bidding wars. Don’t you want a savvy and professional negotiator on your side to seal the best deal for you?
And it’s not just about how much money you end up spending or netting. A Real Estate Agent will help draw up a purchase agreement that allows enough time for inspections, contingencies, and anything else that’s crucial to your particular needs.
4. They’re connected to everyone
Real Estate Agents might not know everything, but they make it their mission to know just about everyone who can possibly help in the process of buying or selling a home. Mortgage brokers, real estate attorneys, home inspectors, home stagers, interior designers—the list goes on—and they’re all in your Real Estate Agent’s network. Use them.
FREE DOWNLOAD: The Complete Home Sellers Guide
5. They’re your sage parent/data analyst/therapist—all rolled into one
The thing about Real Estate Agents: They wear a lot of different hats. Sure, they’re salespeople, but they actually do a whole heck of a lot to earn their commission. They’re constantly driving around, checking out listings for you. They spend their own money on marketing your home (if you’re selling). They’re researching comps to make sure you’re getting the best deal.
And, of course, they’re working for you at nearly all hours of the day and night—whether you need more info on a home or just someone to talk to in order to feel at ease with the offer you just put in. This is the biggest financial (and possibly emotional) decision of your life, and guiding you through it isn’t a responsibility Real Estate Agents take lightly.
Did you try the DIY route and the go Agent? Tell us about your experience. Sound of on the Patrick Parker Realty Facebook Page, our Twitter or LinkedIn Feeds or on our Instagram account. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
Assessed Value vs. Market Value: What’s the Difference?
Homes don’t come with sticker prices set in stone. Rather they are moving targets – that’s what makes buying and selling real estate so fun! (Or frustrating, depending on your perspective.) And, as a buyer or seller, you will likely hear two “prices” thrown about: assessed value and market value. So what’s the difference?
While assessed value and market value may seem similar, these numbers can be different – typically assessed value is lower – and they’re used in distinct ways as well. So, let’s clear up any confusion so you can wield these terms to your advantage.
What is Market Value?
The technical definition of market value is “the most probable price that a given property will bring in an open market transaction.” Or, in plain English, “It’s the price that a buyer is willing to pay for a home, and that a seller is willing to accept.”
Real estate agents are trained to pinpoint a home’s market value, which is done by looking at a variety of characteristics, including the following:
• External characteristics: Curb appeal, exterior condition of the home, lot size, home style, availability of public utilities.
• Internal characteristics: Size and number of rooms, construction and appliance quality and condition, heating systems, and energy efficiency.
• Comps or comparables: What similar homes in the same area have sold for recently.
• Supply and demand: The number of buyers and the number of sellers in your area.
• Location: How desirable is the neighborhood? Are the schools good? Is the crime rate low?
A home’s market value often is a good starting point for all kinds of things. For one, listing agents use market value to help sellers come up with a fair asking price for their home. And, since buyers shouldn’t just trust what sellers say their place is worth, their own agent can also estimate the home’s market value and come up with a different price that they think their clients should offer. No number is right or wrong; the ultimate deciding force is what price a buyer and seller are willing to shake hands on to close the deal.
What is Assessed Value?
When trying to understand the assessed value of a property, you must know who is doing the assessing and why the property is being assessed.
Municipalities, mostly counties, employ an assessor to place a value on a home in order to levy property taxes on it. To arrive at a value, the assessor (similar to a real estate agent) looks at what similar properties are selling for, the value of any recent improvements, any income you may be making from, say, renting out a room in the property, and other factors – like the replacement cost of the property if, God forbid, it burns down in a fire (which sounds dark, but assessors are thorough professionals who consider every possibility).
In the end, the assessor comes up with a value of your home. Then, he multiplies that number by an “assessment rate,” a uniform percentage that each tax jurisdiction sets that is typically 80% to 90%. So if, say, the market value of your home is $400,000 and your local assessment rate is 80%, then the assessed value of your home is $320,000.
That $320,000 is then used by your local government to calculate your property taxes. The higher your home’s assessed value, the more you’ll pay in taxes. You can check with your local tax assessor for a more exact figure for your home, or search by state, county, and ZIP code on publicrecords.netronline.com.
What Assessed and Market Values Mean to You?
While a home’s market value can rise and fall precipitously based on local conditions, assessed values are typically more immune to fluctuations. (Some states prohibit the assessed value from rising more than 3% a year even if market value increases.)
But the bottom line is, don’t get bent out of shape if you hear your assessed value isn’t as high as you’d hoped. Assessed value is used mostly for property tax purposes. Home buyers and sellers, on the other hand, look more to market value instead.
However, assessed value can come up when you buy or sell a home because this number, unlike the more subjective market value, is public knowledge contained in property records. So, rising assessed values bode well when home sellers try to justify their sale price to a buyer: “Hey, the assessed value is $310,000, and I’m only asking $320,000.” Likewise, buyers can use assessed value to justify a lower price: “Hey, the assessed value is $260,000, and you’re asking for $300,000. What gives?”
But the thing to remember with both assessed and market value is that at the end of the day, the price of a home is all in the eye of the beholder. The only number that matters is what a buyer and seller can agree sounds right, so don’t take any number you see too seriously.
What has your experience been with market value vs assessed value when selling or buying your home? Sound off on the Patrick Parker Realty Facebook Page or on our Twitter or LinkedIn feeds. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
4 Common (but Terrible) Reasons for Overpricing Your Home
We know, we know—you love your house. The kitchen is the perfect size, your weekly summer barbecues give your neighbors patio envy, and your ’70s-style conversation pit is totally coming back into vogue—as you knew it would.
You’ve seen the comps for your neighborhood, but you just know your home is worth more, so you’re going to list it at a higher price.
HAVEN’T SEEN YOUR COMPS? Request A Free Comparable Market Analysis
This is one of a few reasons why sellers overprice their home, and none are smart. If you price your home too high, it’ll take longer to sell, raising doubts in buyers’ minds about whether there’s something wrong with it, and you’ll probably have to drop the price eventually anyway.
So don’t fall for any of these five common justifications sellers use to inflate the price of their beloved property:
1. You have the Midas touch in decor (you think)
The reason that interiors are often painted white or neutral colors before a sale is that that allows potential buyers to envision what colors would make it their home. Your colorful touches might not be for everyone, and can actually devalue your house.
RELATED: To Sell Your Home Think Like A Buyer
Recently an Agent listed a home for a client whose bathrooms were all sorts of strange colors—olive-green toilets, a purple bathtub, and a pink sink. Agents need to be honest with you at all costs – pun intended. But when it was recommended to the seller a price that factored in the cost of necessary updates, things got a little heated.
The owner was upset and argued that the colorful fixtures added value, because people are tired of the all-white, stale hospital look.
So we tried the seller’s way first, listing it for his desired price. It didn’t sell, and buyers gave feedback that the home was overpriced. After weeks on the market, the seller finally agreed to lower the price. It sold within 2 weeks.
2. You’re nitpicking comps
Comps (or comparable market analysis) are valuable reference points that allow you to compare your home to similar nearby homes in order to price it right. But some sellers place too much value on ultimately negligible differences between their home and the comps.
Recently an Agent received the following feedback from a seller; “My home has a 60-gallon hot water heater; every other home has 40. My deck is 60 feet larger. My den has real barn wood paneling.”
While small features like this might be worth pointing out to potential buyers, they are not going to make or break a deal – and trying to price your home based on the size of your deck is a setup for disappointment. Plus, you might not see the flaws in your home – your deck might be big, but it might also need work.
We don’t want to be a downer; by nature, we see life through rose-colored glasses. Sadly, it can cost you when it comes to selling your home.
3. You’re too focused on your ROI
A house is an investment, and everyone wants a return on their investment. Couple that with emotional attachment, and you’re primed to mark up your home’s value.
We often find Sellers think that their house is worth what they want or need to sell it for, but the harsh reality is that a home is worth whatever a buyer is ready, willing, and able to pay for it.
FREE DOWNLOAD: Your Ultimate Home Sellers Guide
Even in a seller’s market, there’s no guarantee that you’ll make money on your house. And just because you need $500,000 to buy that house in Shark River Hills doesn’t mean you can sell your house for the same amount.
4. You’re imagining you’ll haggle
Perhaps the most common reason people overprice their home is because they’re looking to negotiate.
On paper, it sounds like something you’d see on “Pawn Stars.” You offer up a vintage silver tea set at an inflated price. Rick Harrison offers you 25% of that, but he eventually goes up to 30%.
OK, maybe “Pawn Stars” is a bad example, but you get the idea: You price your house 10% higher, fully expecting a buyer to try to lowball you, netting you the price you wanted all along while the buyer walks away thinking he got a bargain.
It doesn’t work like that in real estate.
It’s much better to price it right and create such interest and demand where buyers are chasing you, versus you chasing the market backward [and] searching for the demand.
RELATED: The Importance of Proper Pricing
So don’t be afraid to price your home fairly, or price it based on your Agent’s advice. This is what will attract buyers and boost the price to where it should be.
Ultimately, everything sells when it’s priced right.
FREE DOWNLOAD: Your Ultimate Home Sellers Guide
Did you recently sell your home? What experience did you have when it came to proper pricing? Are you currently selling? What are your proper pricing observations?
All Signs A Go For A Strong Selling Season
The number of homes that in April went under contract to be sold climbed to the highest level in over a decade, a sign the housing market is gaining traction and supported by steady job creation and historically low interest rates.
Pending sales of previously owned homes, reflecting contract signings, rose 5.1% last month from March said the National Association of Realtors, handily exceeding the 0.7% rise expected by economists surveyed by The Wall Street Journal.
FREE DOWNLOAD: How to Put Your Home on The Market and Attract Buyers Today
In addition, Pending sales in April rose 4.6% compared with a year earlier, marking the 20th consecutive month of year-over-year gains. Pending sales provide a more up-to-date assessment of the housing market than other measures because they are based on contract signings, the earliest stage of the sales process.
Home Sales Climb to Highest Level in a Decade!
The sales index climbed to 116.3, the highest level since February 2006. An index of 100 is equal to the average level of contract activity during 2001, which the NAR considers a “normal,” or balanced, market for the current U.S. population.
The U.S. housing-market activity continues to improve, and all indications thus far point to a strong spring selling season.
Steady demand for housing has tightened supply and pushed up, but simultaneous low mortgage rates are not deterring buyers.
FREE DOWNLOAD: Your Ultimate Home Selling Guide
Thinking of selling this season? Ask us why now is the perfect time!
Economists’ Top Tips for Selling a Home in 2016
If you’re planning to sell your house this year, well, you’re in luck.
“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory, and fierce competition between buyers,” says Jonathan Smoke, chief economist for realtor.com®.
But you could still make missteps on the way to the bank. Yes, your house will likely sell, but when?
It’s truly about understanding the ins and outs of the local market so you can optimize the price of your home and close quickly.
Here is an analysis of market trends of top tips for homeowners looking to sell in 2016:
1. Price your home to the market
The most important factor in selling your home quickly is getting the price right. And getting the price right the first time. Consulting with an Agent and getting a Comparative Market Analysis (CMA) is the absolute first step to take.
Sellers who work with a local Realtor to optimize the price of their home based on its unique features and surrounding neighborhood are often able to receive the highest price for their market and sell more quickly.
In 2016, prices are expected to increase nationally 3% year over year. Local price changes are anticipated to be more dramatic but it is important to understand what is true of your own neighborhood. This is why a CMA is so important.
Making the error of going for a price that’s well above the market price is a recipe for being let down and potentially not selling the home. A home that sits on the market eventually will turn off buyers, who will suspect that something is wrong with it.
2. List during peak season
Unlike buyers, who want to minimize competition, sellers benefit from demand. Prime home-buying season begins in April and reaches its peak in June. Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings.
FREE DOWNLOAD: The Ultimate Home Sellers Guide for 2016
3. Offer incentives
This one seems counter-intuitive, given what we’ve said about a seller’s market, but… last year – the best for U.S. home sales in nearly a decade – 37% of all sellers offered incentives to attract buyers.
The nature of this market is that you’re going to have more first-time buyers, who are more dependent on financing. Getting a loan is one thing; coming up with a chunk of cash for closing costs, on top of the down payment, is another.
If you’re a seller and you’re able to offer some money toward closing costs, you’re actually making it easier on that buyer, and they might be more willing to give you the full asking price or more! You could end up with a faster sale and bigger profit.
Are you preparing to sell? Which of the above tips excite you most?
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20 Best Questions to Ask a Real Estate Agent… and the Answers You Want to Hear
Looking to hire a real estate agent to sell your home? Play 20 Questions.
Ask these questions of real estate agents before you hire one. Compare as many agents as you need until you feel comfortable and confident with one:
1. Do you work full or part-time as a real estate agent?
Full-time agents are likely to give you (and your potential home buyers) more time and attention.
2. How many homes have you sold in my neighborhood in the past year or two?
Ideally, you want someone with a track record in your neighborhood and preferably in your price range. If you live in a town that has different property types (e.g. co-op, condo) see how much experience they have selling what you have.
The more stats and data the agent is willing to provide (houses sold, prices, average sale to list price ratio, average days on the market, etc.), the more confident they are in sharing their expertise and their ability to sell your home.
3. How many sellers are you representing now?
This can cut two ways; a busy agent may be too busy and an agent with no clients may have more time to market your home. You should try to read the situation and consider how they answer your other questions.
4. What aspects of the transaction will you personally handle and which will be delegated to others?
You want to know the extent of your agent’s work and involvement in the process. While some delegate – and that’s not necessarily bad – others are hands-on and take you through the process from beginning to end.
This question ultimately tests the agent’s knowledge of the process; marketing/advertising / signage, open houses, negotiation of price and terms, qualification of buyers, contract negotiation, title, home inspections, closing.
5. Are your fees negotiable?
Most real estate agent compensation is negotiable. There are many ways to go, from a flat fee to a traditional percentage of the sales price. Business models are continually evolving. If you are the creative type and have an idea on compensation, run it by the agent.
6. At what price do you think my house will sell in the current market? And why?
This will give you an understanding of the agent’s knowledge of the market and their thought process in pricing your home, the most important decision you’ll have to make.
An experienced Realtor will refer to the recent market data, the current pool of comparable homes on the market, and your home’s condition and amenities in giving you an answer. If they rely solely on a value based on Zillow or any computer generated home value … run!
7. Can you give me a written CMA and a list of homes currently on the market?
All agents should give you a written comparative market analysis (CMA). The detail (or lack thereof) of the report will tell you a lot about the agent and their knowledge of the market. If there are comps in there you know are crappy, play it cool and ask the agent why so-and-so’s home is comparable. Their answer will be revealing.
8. What is your advertising and marketing plan for my house?
A blend of online and offline marketing will reach a broader spectrum of buyers. Know the manner and frequency of advertising and any open houses. The issue of open houses is hotly debated by professionals, many who feel they do not produce buyers. There should at least be brokers’ open.
FREE DOWNLOAD: Getting Your Home Sold! Your 25-Point Marketing Plan
Photos: The more photos a listing has, the more attention the home will get. Ask how many will be taken and by whom. A professional photographer is preferable. There is an ongoing debate whether video is necessary for a listing to sell. A video of the home and/or neighborhood, done by a professional videographer will make your home stand out – so ask.
Ask to see sample marketing materials. All agents will list your home in the local MLS and on their website (make sure they have one) so that’s a given. You want to know what else will be done. Compare it to the marketing plan and materials of other agents.
9. How long must I list my house with you?
Most consumer experts say a three month or less listing period is preferable. In this market, that may not be enough time to evaluate the abilities of your agent but you can always renew the listing agreement. If you have the free right to cancel the listing agreement (if you are unhappy with the agent), the term is not that important.
10. How long have you been a real estate agent?
Generally an agent with at least four years’ experience shows a dedication to the profession and an ample opportunity to acquire a good sense of the market. As far as education goes, by law, agents are required to take classes to keep their license in good standing — so look for education that goes above and beyond their minimum requirements. Ask what kind of ongoing coaching they receive in-house at their brokerage.
11. Is your real estate license in good standing and have you ever been subject to a client complaint?
There are websites to check an agent’s license. Ask the agent to provide it to you.
TIP: Check the New Jersey Real Estate License Search
Enter the name or the agent and select “Actively Licensed” from the Select License Status dropdown menu. You should not need Ref Number or License Type. If you liked the agent you met with but were unable to find them, ask why, it may be an issue with the full name they are licensed under, or a Ref Number of License Type can help.
12. Can you provide me the names and phone numbers of past clients as references?
Ask if any of the references are relatives. Check out the references.
TIP: Another option is to check New Jersey Real Estate Agent Reviews on sites such as Zillow
These are often unsolicited, unbiased and show a client’s interest in sharing their experience with others… this says a lot about that experience.
13. Do you work with stagers or will you stage my home?
In this market, your house has to be dressed to sell. Home staging truly is a must. It is one thing to take a listing and market it and quite another to sell it. Ask the agent to make suggestions to improve the salability of your home – it will probably involve your kitchen and baths, the most common areas of buyer interest and generally the best home improvement return on investment (ROI).
Don’t be offended if an agent asks you to remove personal items. We know it is your home, we know these items are sentimental, but you really want prospective buyers to see themselves in your home. And your home in their future. Their future does not include the family photos you are so proud of. It is hard, but try and think like the buyer on this one.
RELATED: The Importance of Home Staging
14. How often will you communicate with me?
Ideally, your Realtor should communicate with you regularly, updating you with any new information/concerns. They must inform you of all offers. They should have email and be reachable most of the time should you have a question or concern. Ask when they are not reachable.
Another good question to ask is their preferred communication method. Everybody has one, even you. Perhaps you’ll get a quicker response via text than you will via email. It is helpful to know these things.
15. Why should I hire you over your competition?
The agent should have a ready answer. Most sellers are looking for a real estate agent who is:
– Experienced in the local market
– Excellent negotiators
– Readily available by phone or e-mail
– Good communicators
– Quick to return calls or emails
– Successful in getting results
16. May I see the documents I will have to sign?
These should include, of course, the listing agreement and sales contract. If the listing agreement does not have a cancellation clause, ask if you can cancel if you are unhappy with the services. Again, if you have the free right to cancel, the length of the listing agreement does not matter much. Read all documents and ask questions if you don’t understand anything. There are several types of listing agreements. Like any legal document, you can run it by an attorney.
17. What will be my closing costs?
A feel for closing costs helps sellers understand the process more completely. And understanding removes anxiety.
RELATED: How Does the Closing Process Work?
18. Can you explain the process to me?
This will give you all the steps involved in selling a home and why an agent is a valuable expert to have on your side.
RELATED: The Home Selling Process
19. Do you have a website and/or blog?
Virtually all agents have a website. Visit it to get a sense of the agent and the brand. Not many agents have blogs – though if you’re reading this you know Patrick Parker Realty does. Visit and read Real Estate Blog Posts. You will not only get a feel for the expertise of the Agent and their team, but blogging is a critical aspect to overall marketing these days… content of value pulls qualified buyers inward toward your Listing!
20. What haven’t I asked you that I need to know?
This catch-all can prevent surprises later on.
What apartment decorating and rental rules have you broken? Sound off on our Facebook or Twitter pages and don’t forget to sign up for our monthly Patrick Parker Realty eNewsletter for articles like this delivered straight to your inbox!
The 10 Sins of Selling
On average, home sellers commit up to five of these home-selling “sins” and lose thousands of dollars on their home sale as a result. The good news? All of these mistakes are easily avoidable — if you know how to identify them.
1. Not hiring a professional to sell your house
Trying to sell your home by yourself is sheer madness, and many sellers who try it soon discover this. Even if you’re in a competitive market such as Boston, and you think your home will sell easily, you need the expertise of a real estate professional to score the best deal.
FREE DOWNLOAD: Why Use An Agent to Sell Your Home
2. Neglecting necessary repairs prior to sale
You will lose money if you don’t take care of repairs before your house goes on the market, because they will most likely be discovered during the home inspection. Do necessary repairs before listing and save yourself the last-minute headache of trying to quickly fix issues such as a leaking roof or botched caulk job.
3. Refusing to remove your clutter and junk prior to the sale
Clutter eats equity and kills deals. With all that extra stuff in the way, homebuyers can’t see the home for its true potential, and the offer will reflect that.
4. Selling your house empty
While clutter is bad, selling an empty house makes buyers feel the same way — empty. They need to be able to visualize how the home looks with furniture and how functional it will be for their own family.
5. Mispricing your home
Overpricing or underpricing your house is a huge money-losing mistake. Work with your agent to list your home at the perfect price to make sure it doesn’t sit on the market for too long, or worse, make you forever wonder if you could have gotten more money.
CRITICAL READING: The Importance of Proper Pricing
6. Not setting the stage for sale day
Remember; buyers purchase with their hearts and not their heads. Create a showplace for your buyers on sale day (but don’t go overboard with music or too much potpourri).
7. Letting your emotions get in the way when negotiating
It’s not uncommon – and almost understandable. But many sellers become emotional while negotiating and lose out on creating a win-win deal. Look forward to a bright future as hard as it may be to let your house go.
8. Neglecting to complete a full set of disclosures prior to closing
This one’s simple. Be honest and reveal everything (plus, what you don’t reveal will be discovered by the buyer). Ask your Agent for help with this. Patrick Parker Realty takes our fiduciary duty to represent your interests very seriously. This includes proper disclosure.
9. Preempting the sale for maximum tax benefits
Even one day can cost you tens of thousands in extra taxes. Don’t be left a day late and many dollars short.
10. Overlooking junk fees and extra expenses at closing
Home sellers throw away thousands by not requesting and confirming a list of fees and expenses long before closing day.
Did we miss any home-selling mistakes? What have you learned in retrospect? Sound off in Comments, on the Patrick Parker Realty Facebook or Twitter pages and don’t forget to sign up for the monthly Patrick Parker Realty eNewsletter for more articles like this delivered straight to your inbox.
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