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.
10 Top Secrets To Selling Your Home
So you’ve decided to put your house up for sale. Now what? Aside from hiring a real estate agent, there are a few other important matters to address before your home is listed and potential buyers start coming through the door. Some of these items, more important than others.
FREE DOWNLOAD: Home Selling Essentials
Everything You Need To Know To Sell Your Home
It’s important to remember that while you may look around your abode and see your dream home, not everyone will agree. After all, potential buyers aren’t buying your aesthetic. They’re after square footage, closet space, great light, and up-to-date—maybe even brand-new—appliances and fixtures. Thinking like a buyer, we uncover the Top 10 Secrets to selling your home fast for top-dollar.
Selling Secret #10: Pricing it right
Pricing is the most important aspect of selling your home and you need an experienced Listing Agent with extensive market knowledge. Your Agent will consider up-to-date information on what is happening in the marketplace and the price, and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and smoothly.
RELATED: The Importance of Proper Pricing
Selling Secret #9: Half-empty closets
Storage is something every buyer is looking for and can never have enough of. Take half the stuff out of your closets then neatly organize what’s left in there. Buyers will snoop, so be sure to keep all your closets and cabinets clean and tidy.
Selling Secret #8: Light it up
Maximize the light in your home. After location, good light is the one thing that every buyer cites that they want in a home. Take down the drapes, clean the windows, change the lampshades, increase the wattage of your light bulbs and cut the bushes outside to let in sunshine. Do what you have to do make your house bright and cheery – it will make it more sellable.
Selling Secret #7: Play the agent field
A secret sale killer is hiring the wrong broker. Make sure you have a broker who is totally informed. They must constantly monitor the multiple listing service (MLS), know your marketplace and understand the latest available marketing methods.
Look for a Real Estate Agent who embraces technology – a tech-savvy one has many tools to get your house sold.
Selling Secret #6: Conceal the critters
You might think a cuddly dog would warm the hearts of potential buyers, but you’d be wrong. Not everybody is a dog- or cat-lover. Buyers don’t want to walk in your home and see a bowl full of dog food, smell the kitty litter box or have tufts of pet hair stuck to their clothes. It will give buyers the impression that your house is not clean. If you’re planning an open house, send the critters to a pet hotel for the day.
Selling Secret #5: Don’t over-upgrade
Quick fixes before selling always pay off. Mammoth makeovers, not so much. You probably won’t get your money back if you do a huge improvement project before you put your house on the market. Instead, do updates that will pay off and get you top dollar. Get a new fresh coat of paint on the walls. Clean the curtains or go buy some inexpensive new ones. Replace door handles, cabinet hardware, make sure closet doors are on track, fix leaky faucets and clean the grout.
Selling Secret #4: Take the home out of your house
One of the most important things to do when selling your house is to de-personalize it. The more personal stuff in your house, the less potential buyers can imagine themselves living there. Get rid of a third of your stuff – put it in storage. This includes family photos, memorabilia collections and personal keepsakes. Consider hiring a home stager to maximize the full potential of your home. Staging simply means arranging your furniture to best showcase the floor plan and maximize the use of space.
Selling Secret #3: The kitchen comes first
You’re not actually selling your house, you’re selling your kitchen – that’s how important it is. The benefits of remodeling your kitchen are endless, and the best part of it is that you’ll probably get 85% of your money back. It may be a few thousand dollars to replace countertops where a buyer may knock $10,000 off the asking price if your kitchen looks dated.
The fastest, most inexpensive kitchen updates include painting and new cabinet hardware. Use a neutral-color paint so you can present buyers with a blank canvas where they can start envisioning their own style. If you have a little money to spend, buy one fancy stainless steel appliance. Why one? Because when people see one high-end appliance they think all the rest are expensive too and it updates the kitchen.
Selling Secret #2: Always be ready to show
Your house needs to be “show-ready” at all times – you never know when your buyer is going to walk through the door. You have to be available whenever they want to come see the place and it has to be in tip-top shape. Don’t leave dishes in the sink, keep the dishwasher cleaned out, the bathrooms sparkling and make sure there are no dust bunnies in the corners. It’s a little inconvenient, but it will get your house sold.
Selling Secret #1: The first impression is the only impression
No matter how good the interior of your home looks, buyers have already judged your home before they walk through the door. You never have a second chance to make a first impression. It’s important to make people feel warm, welcome and safe as they approach the house. Spruce up your home’s exterior with inexpensive shrubs and brightly colored flowers. You can typically get a 100-percent return on the money you put into your home’s curb appeal. Entryways are also important. You use it as a utility space for your coat and keys. But, when you’re selling, make it welcoming by putting in a small bench, a vase of fresh-cut flowers or even some cookies.
What home selling secrets do you have to add to our list? We want to hear from you! Sound of on our Facebook Page, Twitter or Instagram feeds or connect with us on LinkedIn. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for great tips for homeowners and sellers 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.
How Do You Find a Real Estate Agent?
There are NO standards for Real Estate Agents. GOOGLE every Agent considered and verify everything they say
Hiring a Real Estate Agent is a job interview – someone is going to be responsible for one of the largest transactions in your life. Incredibly, studies consistently show that the majority of buyers and sellers fail to treat Agent selection seriously.
In a field with few to no established performance standards, ridiculous self-aggrandizement and bogus production reporting, how are the qualified and high producing Agents found? In about 15 minutes with Google search and seven direct questions.
Before anything, GOOGLE every New Jersey Real Estate Agent that you are considering. Real Estate has exploded with the internet; any productive Agent understands and embraces this. Examine reviews, their website, articles, social media…they will be your representative. After that, a few simple and very direct questions will narrow the pool. It’s possible Uncle Jack or Aunt Cathy won’t make the cut.
1. Are you a full-time Agent?
This question must be asked because so many Agents are not, Real Estate is a second, third or fourth job. It is impossible to effectively work part time; the speed of transactions, increased legal requirements and fluid market mandate full attention. Society has been conditioned to expect answers quickly, at all times. Agents that can’t or won’t pay attention cost clients money and opportunity.
2. How long have you been actively selling Real Estate and for whom?
Two years of full time work or about 20 personal transactions is a recommended minimum. The skills required for contracts, data collection, negotiation etc., cannot be taught in a class room. Many “discount” firms exist often housing Agents that want to hang their license at a place that doesn’t charge full fees. Research into the firm is as important as that for the Agent.
3. What are your personal production levels over the last three years?
If an Agent can’t live off their earnings, they are not producers. A full-time Agent should have at least 10-12 transactions per year personally completed, not as part of a team, an office or some other entity. Some Agents tie into office or team production – focus on their production only and be certain to verify this.
4. Verify the figure you are provided and request a copy of their report.
Personal stats must be for the Agent only – not a team or office. Request a copy of their personal production; this can be pulled off the MLS or from their Brokerage firm.
5. Is your managing Broker on site at your office and responsible for it?
Many discount firms have “Broker pools” – not specific managing Brokers that guide Agents. When things go bad and that Agent is clueless, will the Broker step up?
6. Please provide five references over the last year that I can call.
This will verify experience with past clients and by keeping the date within a year; it will demonstrate experience in the current market. Call the references and ask questions.
Also understand the difference between Real Estate Agent references and testimonials vs. reviews. References and testimonials you receive from your prospective next Agent will always present that Agent in the most positive light. Unsolicited reviews, however, are more honest. Websites like Zillow and Trulia are great resources for Jersey Shore Real Estate Agent reviews.
7. Please provide a copy of your resume.
Every Agent likely has an alphabet of nonsensical designations; most are obtained by writing a check. Many Real Estate designations were invented during the crash as a way of generating income for various associations – don’t fall for the nonsense.
These are reasonable, direct questions; others can be added as needed. This type of pre-screening should be completed ahead of any listing appointments or before meaningful meetings begin. Obviously, there are a plethora of additional, more specific questions depending on the circumstances, but a few minutes spent ahead of time will save time and money down the road.
Selection of a Real Estate Agent is arguably the single most important decision a buyer or seller makes. Until consumers demand high standards, the problem of inept and incompetent Real Estate Agents will remain.
How did you successfully interview your last Agent? Or, did you fall just short of all due diligence an end up in a nightmare scenario? Sound of on the Patrick Parker Realty Facebook Page, on our Twitter or LinkedIn feeds, and don’t forget to subscribe to our monthly email newsletter for articles like this one delivered straight to your inbox.
8 Surprising Factors That Can Affect Your Home’s Value
Besides the obvious factors, there are some quirky elements that can affect your home’s value. Find out what they are.
Surprise! You might know more about real estate than you think. For example, you know that square footage, number of bedrooms and bathrooms, lot size, and location determine home value: A 4,000-square-foot, five-bed, five-bath beachfront in Bradley Beach, NJ, will almost always be worth more than a 2,000-square-foot, two-bed, two-bath home on a quarter-acre lot 20 miles inland.
But those obvious factors aren’t everything you need to calculate your home’s property value estimate. Other, less obvious features can negatively or positively come into play — features you might not have considered.
Here are eight frequently overlooked (and not always fixable) things that, for better or for worse, can impact the value of your home:
1. The Name of Your Street (really!)
People typically prefer the street they live on to have a name versus a number. It’s true nationwide (with the exceptions of New York, NY, and Atlanta, GA, where there is no difference, and Denver, CO, where numbers are favored). According to a study by Trulia, “street” is the least expensive address suffix by price per square foot, and “boulevard” is the most expensive.
2. Your House Number
Ever heard of house numerology? This is the practice of assigning a single-digit number to your home based on its address. Let’s say your address is 1219 Main Street. Add 1 + 2 + 1 + 9 to get 13. Then add 1 + 3. Your house would be 4: good for investments and security but bad for adventure and excitement. While this type of house numerology may be passed off as a superstition, buyers who subscribe to this theory may overlook potential homes because of their numerology calculations. However, whether or not you’re into numerology, house numbers do matter. If your address is 13 (a universally unlucky number), you might choose to price your home slightly less than your neighbor at number 12 did.
3. Sketchy neighbors
The closer you live to your neighbor, the more important it will be for your tastes, habits, and personalities to jive with theirs. In a condo, the last thing a potential buyer wants is to purchase a unit where the neighbors above are noisy or inconsiderate. Owners of single-family homes can thank fastidious neighbors with good taste to increase the values of all nearby homes. But, of course, the opposite is also true: as is the case with a homeowner who had great difficulty selling their home because their next-door neighbor constructed a giant memorial dedicated to Michael Jackson on the front lawn.
4. Mature trees
Tree-huggers and environmentalists unite! It’s common practice for developers to cut down most of (or all!) the trees on a property to build homes. But mature trees almost always enhance property values. Still don’t believe it? Check out the National Tree Benefit Calculator to see the full benefits of planting specific types of trees. If you have the space, make a trip to your local nursery to discuss the best tree options for your home.
5. Crown Molding
If you’ve worked hard to select just the right neutral and serene paint color scheme that will probably attract the most buyers, you’re doing yourself a disservice if you neglect one important element: crown molding. “People love crown moldings,” says Patrick Parker, broker and owner of record of Patrick Parker Realty. “Of course, everyone loves high ceilings too,” he says. Although you can’t do anything about how high your ceilings are, you can put in crown moldings — even with lower ceilings. Just make sure they work with the scale of the room, and don’t veer too far into the trend zone.
6. Yankees Memorabilia
Yankee fans, relax. We’re not picking on just you. Although this anecdote from New Jersey happens to be about the New York baseball team, you could insert any team here. We’ve seen a home wall papered in Yankee memorabilia, even a family room adjourned with baseball themed carpeting. The verdict? Many people were turned off, especially Red Sox fans. If you don’t want to alienate a potential buyer, you might want to stash the fan gear away while your home is on the market.
And Trader Joe’s and Whole Foods. If you have any of those establishments close by, typically within a mile, up goes your property’s value. “Homes near Trader Joe’s have increased in value by an average of 40% since purchased,” says Chris Leavitt former star of the TV series Million Dollar Listing. “Nearby Starbucks and Whole Foods Markets also enjoyed double-digit gains on home value.”
8. A Death on the Property
In some states sellers must disclose whether there was a death on the property, which can be a deal breaker for some buyers. On average, once buyers find out there has been a death on the property, two out of five lose interest.
RELATED: Seller Disclosure in New Jersey
There’s even a name for a home someone died in: stigmatized. It refers to a home that has been the site of a murder, suicide, or paranormal activity or haunting. But even if your state doesn’t have a death disclosure requirement, certainly if someone asks, you should fess up. It’s the right thing to do.
Have you discovered an unusual factor while calculating your home’s property value? Share it with us on the Patrick Parker Realty Facebook Page, Twitter feed or LinkedIn profile. And don’t forget to subscribe to the monthly Patrick Parker Realty email newsletter for articles like this one delivered straight to your inbox.
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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A Quick ‘Cover Your Bases’ Home Prep Checklist
Selling a home doesn’t happen overnight. To maximize your sale price, stand out from the competition and sell quickly, your home needs to go on the market in tip-top condition.
You only get one chance to make a good first impression in real estate. Once your home’s listing goes live, the days on market start ticking. In the Internet age, with access to so much information, buyers will punish a seller whose home has been on the market for many months. If you can’t make the effort to get your home in it’s best condition, hold off on listing it.
Prepping the home rarely happens in one weekend. It takes time and thoughtful planning. If you intend to sell your home this season, here are a few steps you should take now:
Today’s buyers have research in their DNA and will investigate all they can. Check with your local building department and ensure there are no outstanding issues with your home.
RELATED: To Sell Your Home Think Like A Buyer
Verify that property records reflect your home accurately, and prepare to remedy any discrepancy. Make sure your title report is clean, and talk about potential disclosure items with your agent. Banks won’t lend if there are outstanding issues, and you don’t want to jump through hoops at the eleventh hour. Researching now will keep you one step ahead of the buyers.
It may seem counterintuitive to spend money on a property inspection, but you need to know about your home’s condition. If there are issues — big or small — you need to address, it is better to know about them early so you can either remedy them prior to going to market or account for them with a lower listing price.
The last thing you want is for the buyer to uncover flaws once they are under contract. You will
get stuck paying more under those circumstances than it would cost you to address the issues now.
As you prepare to sell, think of your home as an investment and start to see it through the eyes of potential buyers and the market. When you’re trying to sell your home, the less-is-more approach applies.
Put away big furniture and personal items. Store or put away all the things you won’t be using until you move into your new home. In the kitchen, make space in the cabinets for items you will need to use daily, but will want to put away for showings.
It’s common for sellers to make cosmetic improvements before they list. Kitchens and bathrooms sell your home. Plan to have the bathroom grout cleaned and have some parts of the house painted to give it a fresh look.
Consider cleaning rugs, refinishing hardwood floors or painting kitchen cabinets. If you plan to list in the spring, you likely have a good local real estate agent on your side by now. Get their advice and ask for referrals to do the work. There are lots of inexpensive contractors who can help spruce up your home quickly.
5. Consult with An Agent
The sale of your home is likely one of your biggest financial transactions. Get a real estate agent on your team early, and make a list of all the tasks you need to complete before listing this spring. Contact one of our experienced Agents to request a complimentary consultation.
Now is the time to have those discussions. Smart planning and a good strategy will ensure a quick, painless and profitable home sale.
If you’re thinking about selling your home, we’re hoping you’ll find all the content being shared this month useful. Join the conversation throughout Staging Month by engaging with us on Facebook, Twitter and LinkedIn.
And don’t forget to subscribe to the monthly Patrick Parker Realty email newsletter for articles like these delivered straight to your inbox!
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