How to Net the Maximum from the Sale of Your Home

Setting the right price at the beginning of the listing can mean the difference of thousands of dollars in the end.  Here is why:

A home generates the most interest when it is fresh and new on the market.  Buyers who have been shopping will recognize a well-priced offering immediately and will rush to see it in the early days on the market.  In today’s highly competitive selling market, early offers tend to be at or above asking price. 

Sellers are competing for the same buyers in a given area.  By being the most interesting offering in your price category, you are most likely to win the best qualified buyers in your market.  Well qualified is defined as people who are preapproved to purchase a home at your set price.  These buyers have done their homework and are ready to give full market value, sometimes a little more to win the property that best fits their budget, tastes and lifestyle.  These are not bargain hunters who are looking to negotiate a steal on a stale listing. 

A stale listing or a home that sits on the market too long has clearly been priced incorrectly.  Even if a correction is made and the price or condition is adjusted, buyers will scrutinize your offering and your price and will be less apt to offer full market value.  Savvy buyers know that if it has been on the market more than a few weeks it is overpriced and will start the bargaining at a discount even if the seller has already made price corrections.

Clearly, a home seller will receive the highest and best offers at the beginning of the listing period.  So how do you determine the “sweet spot”?  Getting the price right is a combination of art and science. 

• By evaluating properties that have recently sold that are closest to yours in size, style, location and condition, we can see what buyers have been historically willing to pay for a similar property. 
• An adept and experienced real estate professional can then evaluate function, differences and current market trends to adjust the value and determine the most likely price range for your specific property. 
• A review of the competition will likely show you where in that range to position your offering as the most exciting value in the area.  This will have buyers flocking to your property, cash in hand, ready to sign the contract.  Think you might be a little low?  The market will always correct itself.  If you price at the lower end of your range, competing offers will drive that price back up, sometimes over where you would have priced it at the upper end of your range.

The price is only one piece of the puzzle, however.  How a property is then prepared and presented to the market, the marketing and exposure strategies employed and the number of buyers reached with a given marketing plan all contribute to your success and bottom line. 

Choosing the right agent with the right marketing strategy such as ours will net you more money in your pocket.  Look for an agent that has a comprehensive plan that starts with properly preparing your home for the market, presenting it well, exposing it to a wide audience, and then has a strategy to negotiate and navigate through offers, inspections and closing to make sure your interest and your bottom line are protected from beginning to end. 

Michelle Stanifer

mstanifer@gmail.com

Cell/Text: (440) 391-1304

www.StaniferSpenceTeam.com

What's your property worth? Find out here

How to Price Real Estate

How to Price Real Estate

by Ashley Garner on March 6, 2014 in For Sellers

Today we are excited to welcome back Ashley Garner as our guest writer today. Ashley has been a broker for over 20 years in the Wilmington, NC area. - The KCM Crew

Location may have the most effect on value but Price is without question the most important factor controlling the sale of real estate.  Anything will sell anytime, how long will it take depends on the price.

Think about it this way – you may really want to buy a car for your collection and your favorite happens to be a 1963 Corvette.  So you hear about one for sale, in mint condition, across town but the only problem is the price, the owner is asking $150,000!  Well, although you really, really want a mint condition 1963 Corvette, there is no way you will pay anywhere close to $150,000. In fact, you know that the most a 1963 Corvette has ever sold for is about $200,000 and that was for a very rare model, which this one is not.

Because you are a bit obsessed with owning one of these cars you spend almost all of your free time, and some of the time you should be working, searching the internet for available cars.  Through this exhaustive search you have become somewhat of an expert on the values of 1963 Corvettes, especially in your town.  You happen to know that the particular model for sale across town is worth about $95,000…maybe $100,000.  In fact, if the asking price was $100,000 or even $110,000 you would’ve driven over there today with your checkbook and driven home in a 1963 Corvette!

So why don’t you go make an offer?  Well, let’s face it when you see a price that is so high compared to the actual value it makes you think that the seller is either difficult to deal with and is out of touch with reality or that he must not really want to sell the car. Instead, he is just fishing for the one fool in the world that will pay $150,000 for a car that is worth $95,000.  So you don’t even go look at it or call for more information…you just keep searching the various websites to find the car of your dreams.

Yes, you guessed it - the Corvette in this example actually represents your home or other real estate you might be trying to sell.  (in fact it represents any item that can be bought and sold).

Wiggle room = Bad idea

Most sellers think that it is necessary to “leave a little wiggle room” in the price.  They think this because they think that all buyers will make aggressively low offers…no matter what the asking price.  WRONG!!

Buyers pay the fair market value …in other words they will pay you what it is worth!  Your job is to find out what it is worth and price it at or near that value.

This is where brokers and/or appraisers come into the picture.  The right way to price your property is to have a professional REALTOR/broker or appraiser prepare a CMA (Comparative Market Analysis) on your property.  A CMA involves finding recent sales of similar properties, adjusting for any differences, to arrive at a current market value of your property.  Once you have this value, you should have your broker set the asking price no more than 3% to 5% higher than that current market value.

If you do this, your property will sell quickly for a price equal to exactly what it is worth or higher!   Buyers as a general rule DO NOT make “low-ball” offers, there are some rare occasions when that happens but the vast majority of initial offers are 5% or less below asking price.

If sellers price their property correctly, the buyers will know it immediately because, just like in the Corvette example, buyers spend every spare moment searching the internet for a home. They have made themselves experts on the market value of the particular type of home in the particular area they desire.  For this reason the buyer also knows when a property is overpriced.  Most buyers will not even go look at a property that is overpriced. They say to themselves “why bother?” They assume that the seller is unreasonable and/or is not truly interested in selling the property.

Yesterday, the Buyer’s Specialist that works for my team and I were showing a house to some buyers who were very motivated had already decided on the neighborhood.  The house was well within their price range and met every one of their criteria.  As we stood in the kitchen discussing what price we should offer, we found ourselves drawn to the fact that the house had been on and off of the market for the last four years!

The conversation immediately turned to “what is wrong with this house?”   It turns out that the house hasn’t sold because it was severely overpriced most of that 4 years. It happens to be well priced now but the stigma it carries because of the lengthy time on the market will likely result in it selling for less than it is really worth.

Moral of this whole story is - buyers will pay what it is worth - Seller’s job is to find out what it is worth and set the asking price 3%-5% higher than that number…then sit and wait for the offers to roll in.