PRICING YOUR HOME TO SELL
How to price to sell and still make a profit
The most important part about selling a house is the asking price, which would affect how much profit you make and how long it would take to sell the house. Your real estate agent’s knowledge of the overall market and what’s selling – or not selling – will be invaluable in helping you determine the price. The objective is to find a price that the market will bear but won’t leave money on the table.
Here are some important things to consider:
Time is never on your side in real estate, it is also one of the biggest factors as to whether you make a profit or not.
Studies show that the longer a house stays on the market, the less likely it is to be sold for the original asking price. Therefore if your goal is to make a profit, then think about a price that will encourage buyer activity.
Value vs. Cost
Pricing your home to sell in a timely fashion requires some objectivity. It’s important that you not confuse value with cost – in other words, how much you value your home versus what buyers are willing to pay for it. Don’t place too much emphasis on home improvements when calculating your price, because buyers may not share your taste. For instance, not everyone wants hardwood floors or granite countertops.
Keep it simple.
Because time is of the essence, make it easy for the buyers. Remain flexible on when your agent can schedule showings. Also, avoid putting contingencies on the sale. Though a desirable move-in date makes for a smoother transition between homes, it could cause you to lose the sale altogether.
SELLER ETIQUETTE
Practicing good seller’s etiquette
When your house goes on the market, you’re not only opening the door to prospective buyers, but also sometimes to unknown vendors and naive or unqualified buyers. As with any business transaction, there is an expected protocol to how sellers, buyers and their respective agents interact. Should you find yourself in a sticky situation, alert your agent so he or she can address and remedy the problem.
The aggressive agent
When your agent puts your house on the market, typically all promotional materials state clearly that your agent is the primary contact for buyers and buyers’ agents. However, sometimes a buyer’s agent will contact a seller directly to try to either win over their business or cut the seller’s agent out of the deal. This is not reputable behavior and you should report it to your agent immediately if it happens to you.
The unscrupulous vendor
Have you ever started a business or moved into a new house and suddenly found your mailbox full of junk mail? Unfortunately, this also can happen when you put your house on the market. When you sell your home, it necessitates all kinds of new purchasing decisions and less-than-ethical vendors are keenly aware of this. Though MLS organizations enforce rules on how posted information is used, some companies have found ways to cull information from various sources to produce mass mailing lists. If you find yourself regularly emptying your mailbox of junk, let your agent know. He or she can tap the appropriate sources to prompt an investigation into the matter.
The naive buyer
Yard signs, Internet listings and other advertisements can generate a lot of buzz for your home. Some prospective buyers – particularly first-timers – will be so buzzed to see your home that they’ll simply drop by. If this happens, no matter how nice these unexpected visitors are, it’s best not to humor their enthusiasm by discussing your home or giving an impromptu tour. Instead, politely let them know that your real estate agent is in charge of scheduling tours and provide them with the agent’s contact information. If you attempt to handle these surprise visits on your own, you might inadvertently disclose information that could hurt you during negotiations down the road.
UNDERSTANDING THE BUYER
As the seller, you can control three factors that will affect the sale of your home:
- The home’s condition
- Asking price
- Marketing strategy
However, it’s important to note that there are numerous other factors that influence a buyer, and you need to understand these consumer trends when you enter the sellers’ market. The more your home matches these qualifications, the more competitive it will be in the marketplace. Your real estate agent can advise you on how to best position and market your home to overcome any perceived downsides.
Location
Unfortunately, the most influential factor in determining your home’s appeal to buyers is something you can’t control: its location. According to the National Association of REALTORS(r), neighborhood quality is the No. 1 reason buyers choose certain homes. The second most influential factor is commute times to work and school.
Size
While some buyers want to simplify their lives and downsize to a smaller home, home sizes in general have continued to increase over the decades, nearly doubling in size since the 1950s. Smaller homes typically appeal to first-time home buyers and “empty nesters,” or couples whose children have grown up and moved out.
Amenities
Preferences in floor plans and amenities go in and out of fashion, and your real estate agent can inform you of the “hot ticket” items that are selling homes in your market. If your home lacks certain features, you can renovate to increase its appeal, but be forewarned: That’s not always the right move. Your agent can help you by telling you the correct price range for the house.
8 STEPS TO SELLING YOUR HOME
Getting the Best Value for Your Home – Pricing Your Home to Sell Getting ready to get into the real-estate market?
Most sellers today are nervous and unsure. They wonder: is taking a loss on our house inevitable?
The answer is no! A strategic sales plan, coupled with a smart buy in your new location will ensure that you recoup the maximum value for your home.
Your Strategic Sales Plan
Consult with TTR, to ensure your house is priced competitively and well-staged. Why? Because while there are always three factors to getting a home sold—location, price, and condition—only two are under your control: price and condition. Of the two, which is more significant? Price. Remember that price will correct bad condition, but condition will never overcome a bad price.
Act fast. You’re in a race against time—the best price you’ll get in today’s market is the one you get now. If you wait, it will be lower. And every month the price on your home decreases, your costs remain the same. For example, Trinity Texas Realty research shows that sellers who listed their home at the price the agent originally recommended, sold the home 38 days faster. This is over a month of mortgage and tax payments! For a home that cost $200,000 at time of purchase, with 20 percent down and an interest rate of 6.5 percent, selling a month sooner results in a savings of $1101.31 for the mortgage alone, not including the taxes and insurance that the homeowner would be paying during this time.
Don’t worry about where the market has been, keep your focus on where it is going. The price your neighbor down the street got six months ago is not relevant in a market where your house is competing with others from all across town. Again, a local real estate agent will have the kind of long-term, wide-ranging data that will help you decide how to pinpoint your price with precision.
Bottom line: don’t pit yourself against the market, work with the market to get the most out of your house sale.
Why not be foreclosed? Why sell short?
Headlines today are filled with stories about homeowners in financial distress—people who face a lender’s foreclosure on their home.
Millions of American home owners are wondering what to do.
Like most crises, this one has produced its share of rumors and misinformation. One of the biggest ones is “just let it happen.” Why fight back, this line of thinking goes. It’s too emotionally draining, and the government’s loan modifications aren’t helping many people. Well, that’s only partly true.
While government loan modification programs have fallen short of the mark so far, there is another solid, sensible option for homeowners. It’s called a short sale—a sale to a buyer where the seller’s lender agrees to accept less than the full amount owned.
- Avoid the foreclosure stigma – Homeowners will always have to disclose that they had a foreclosure on any mortgage application and (many job applications) that they submit in the future. This can have an adverse effect on their future mortgage rates. Foreclosure is asked about specifically in credit inquiries. There is no seven-year time limit on this item.
- Protect credit score – Credit scores will be lowered by 300-plus points (per loan) by foreclosure. The impact of a short sale—about half that much.
- Improve eligibility for a government insured loan – The homeowner will be ineligible for a government insured loan for 5-7 years (only two years in a short sale). A foreclosure is the one credit report item that is almost impossible to have repaired.
- Avoid a deficiency judgment – Lenders can seek a deficiency judgment against the homeowner and collect any amount they do not recover at sale.
- Protect employment prospects – Many employers run credit checks on prospective employees. Foreclosure is one of the top items that will put a potential new hire, or even current employment, in jeopardy.
Stage It, Sell It, Profit!
Turn on any popular home network on cable TV and you’ll find a program on staging.
Re-arrange your furniture, pick a soothing color palette, clear out the family photos, and your home will sell faster, and for more money. Sound too frou-frou to be true?
It’s not! The soft and decorative side of staging is backed by hard facts.
Real estate agents like great-looking homes because they are easier to sell. Why is that important?
- An agent’s job is to please their clients, and they will direct their buyers to the homes they think they will buy.
- Agents talk to other agents who are also directing their buyers to the best homes on the market. An attractive listing will be shown more often, meaning more market exposure—critical for a quick and profitable house sale.
- Staging is non-negotiable in many parts of the country. Staging a listing for sale in an area where the concept hasn’t caught on can give you an advantage, particularly if there are many unsold listings similar to yours on the market. Buyers gravitate to listings that look good and are in move-in condition.
- Buyers are looking for value. When prices are flat or on the decline, buyers need to perceive that the house is worth the price.
Bottom line: staging is more than an exercise in tasteful interior design. It is a business decision that can have a huge impact on your financial return and timeline. Trinity Texas Realty provides superior Level of Service
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