So you’ve decided it’s time to sell your home. It’s a straight up sale, no short sale worries, etc. You have equity and it is time to either move up, or move down, or move away. Whatever the reason, you want to sell your home.
Now, I understand that you have all the modern upgrades. Perhaps a swimming pool, a nicely manicured landscape, large backyard, custom moldings, etc. And you tell me because of that, your home should sell for mmmm….$30-50K ABOVE what’s currently selling in your neighborhood. Stop right there…
I know, your house is beautiful and believe me, I want to sell it for you. But here are some straight up facts that we must hash out beforehand: When it comes to selling your home, focus on that which you can control, not that which you can’t.
You CAN control: The price at which you want to list your house.
You CAN’T control: The price that will be offered to you by a potential buyer.
You also CAN’T control:
- Market conditions and the Competition
- Interest rates
- The location of your property
- When the perfect buyer will show up
Let’s talk about these items in detail…
Market Conditions and the Competition
As you may know, the real estate market has taken a dramatic shift in the past few years. Five years ago property rates were climbing as high as 50% per year before it all came crashing down a few years later. Home prices (including yours) have declined, and that’s the reality. Even though news and realtor reports state claims of a ‘home inventory shortage’, it doesn’t necessarily mean a total seller’s market. You are now competing with short sales and bank-owned properties as well as other sellers who, like you, just wish to sell and find another place to live. Even though short sale and bank-owned homes are listed at Fair Market Value (FMV), their condition still dictates their final appraisal value. They are still considered comparable properties as they are the ones that have actually sold in your neighborhood, and there is a huge difference between what homes may be listed at, and what they actually sell for.
Interest Rates
Fortunately as of this writing, interest rates are at historic lows. Also, most buyers who have been pre-qualified by a lender are REALLY pre-qualified, which can be good news for you. An offer that comes in from a qualified buyer has the best chance of success and sale. That being said, we do not have control over interest rates and any number of national financial or economic issues can change that at a moment’s notice. Remember that the higher the interest rate, the less dollar amount the potential buyer can qualify for.
The Location of Your Property
Perhaps when you bought your home it was located in a lovely, quiet neighborhood that backed up to a wonderful meadow complete with wildflowers, bunnies and green hills. A few years later, developers and city planners build a road behind your home and a new housing tract goes up. Now your idyllic dreamhome backs up to another neighborhood and traffic.
OR…Maybe you bought that home on the street corner because of its lovely swimming pool, huge backyard and modern, upgraded interior AND…because it practically a STEAL! Now, consider that fact when you now have to sell your home that might not be as appealing from a location point-of-view.
When the Perfect Buyer Shows Up
Face it. When I list your home you will undoubtedly have a lot of people walking through your home, and you won’t know who that one perfect buyer is until an offer has been submitted. However, if your home is priced out of the market, you’ll never see that offer. A lot of times if your home is overpriced, other agents will show your home to compare it to the one down the street (possibly their listing) that’s more reasonably priced.
So what is the rule when pricing your home? Now, this goes against most sellers’ thinking, but the rule is to actually price it LOWER than your competition. Why? Here are some more factors affecting the price of your home:
- Availability
- Timing (AKA Your motivation to sell your home quickly)
- The condition of your home
- Terms
- Warranty
- Amenities
- Lot size, trees, views, privacy, etc.
The importance of pricing your home competitively cannot be stressed enough. In most cases, your first offer may be your best offer, and pricing misconceptions occur because sellers try to price their home based on any of the following:
- The amount of money you paid for the home.
- The amount of money you invested in updating your home.
- The amount of money you want or need to buy a new home.
- The amount of money you want or need to rebuild this home.
- What you neighbor told you he sold his home for.
- What another agent tells you he can sell your home for.
With that, the longer your home sits on the market, the less you may net from the sale of your home. Below is a graph that details how home pricing affects buyer interest:
Note that the more competitively you price your home, the more potential buyers you will have coming through your door.
More potential buyers=more potential offers=more potential counter offers from you=potentially higher sale price.
Just as the principle of value drives any other marketplace, the same principle applies in real estate. Listing your home above current market value WILL NOT get you a valid buyer…period!
I know, it sounds harsh. It sounds like obviously I might not be telling you what you want to hear. But my job is to get you the best price for your home through my education, experience and expertise; and not by providing you lip service or just taking your listing at any price just to plop a sign in your yard and sell everyone else’s home but yours (believe me, there are realtors out there who do this). These are the real facts and they WILL get your home sold fast! Trust me, I’m a professional! Now let’s list your home! Call me at 661.209.7447, or click here for your FREE Comparable Market Analysis of your home. I’ll give you the real deal and get your home sold FAST!
Lisa B. Kaul is a licensed real estate agent serving the Southern California communities of Santa Clarita, the San Fernando Valley, the Antelope Valley, Simi Valley and the Conejo Valley. Lisa also has a vast network of thousands of realtors who are ready to help you anywhere in the U.S.A. For more information, go to http://KaulGirl.com. For more information on avoiding foreclosures, go to http://Kaul4Homes.com